

LIBRARY OF CONGRESS, 



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81ielf..H.BJT1.7 



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UNITED STATES OF AMERICA 



DEC 7 



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SOCIAL WEALTH: 

THE 

Sole Factors mj) Exict Ratios in its 
icquirement ind apportionment. 



\r 



J. K. INGALLS. 



Ill proceeding toward any given point, there is always one line which is 
shortest— The Straight; so, in the conduft of Human Affairs, there is 
always one course which is best — The Just. 





New York: 
THE TRUTH SEEKER COMPANY, 

33 Clinton Place. 
1 88.^. 






Copyrighted, 1885, by J. K. Iugalls. 



CONTENTS. 



Preface. _ - - = 
CHAPTER I. 


^ 


Introductory. - _ - _ 

CHAPTER 11. 


7 


Economic Schools. - - - 


32 


A Brief Review of their Origin and Growth. 




CHAPTER III. 




Eise and Growth of Capitalism. 


40 


CHAPTER IV. 

Unearned Increase. - _ _ 


48 


Profit. — Interest. — Rent. 




CHAPTER y. 




Conservation of Wealth. 


76 


CHAPTER \l. 




Tools and Improved Machinery, 


. 83 


CHAPTER YII. 




The Nature of Wages. 


96 


CHAPTER YIII. 




Private and Social Wealth. 


106 


CHAPTER IX. 




Land Ownership. _ _ . 

CHAPTER X. 


124 


Private Property in Land. 


155 



IV CONTENTS. 

CHAPTER XL 
Capital and the Productive Factors. - - 168 

Active Factor in Production.— Passive Factor in Production. 

CHAPTER XII. 
Partnership and Co-operation. - - 195 

CHAPTER XIII. 

Law of Contracts. _ _ _ 205 

CHAPTER XIV. 

Money and Credit. - - - _ 216 

CHAPTER XV. 

Of Value or Economic Ratios. - - 228 

Ratios in Compensation. — Ratios in Exchange. — Values of 
Land and Labor under Commercial Subjection 
CHAPTER XVL 
Taxation as a Remedy. _ _ _ 255 

CHAPTER XVU. 
Reforms, Not Remedies. - - 265 

CHAPTER XVIIL 

Suggestions to Legislators. - - _ 286 

CHAPTER XIX. 

Conclusion. _ _ _ _ 301 

APPENDIX. 

Summary of Definitions : Economic and Iso- 

nomic. . - - - _ 311 



PREFACE. 



The purpose for which these pages are offered to 
the public is simply to direct inquiry to questions 
intimately related to all human life and employment, 
so that no useful member of society need remain in- 
different to them. We are living under a system of 
capitalistic aggrandizement, or commercial monarch- 
ism, which has no parallel in the history of the race. 
Our teachers in Economics do not disavow, if they 
do not expressly put forth, the claim that this im- 
poverishment of the many to enrich the few is in 
accordance with the orderly evolution of society, and 
in harmony with the natural laws of trade. 

Our political savants offer us nothing but what is 
most delusive and contradictory, while servilely bow- 
ing to the demands of a dominant plutocracy. On 
the other hand, we have importations of the thought 
of European Radicals, Communists, Nihilists, with 
suggestions of revolution, and of measures of reform 
ranging from Anarchism on the one hand, to the 
entire control of all social industry by the state on 
the other. 

In this conflict of thought and nescience, it has 
seemed to me there must be some Natural Relation 
between the worker and the soil from which all must 
subsist ; that there is a principle of law which will 



VI PBEFACE. 

give an equitable share of the products of industry 
to each who shares the labor, and a just principle of 
agreement and consent in regard to such production 
and division. 

I am persuaded there is also a development of 
these laws subject to "arrest," to "retardation and 
acceleration," and that to discover and record their 
growth, is the only true province of the Legislator, 
not the manufacture of statutory enactments. My 
aim has been to direct the attention of all, rich or 
poor, learned or unlearned, to this line of thought. 
If in any degree I have succeeded, my labor will not 
have been in vain. 

There are doubtless great social wrongs to be 
righted, great injustices to be corrected ; but when 
with reasoning minds we read the great lessons of 
history, we discover that Science, or exact and sys- 
temized knowledge, has been the great means of 
progress in every field and in every age, and are as- 
sured that through intelligent industry Nature has 
provided for the satisfaction of all rational human 
wants. Industrial Freedom, and that onl}^ can 
change the conditions which afflict the toiling poor, 
or give to justly acquired competence its required 
security and conservation. 

Glenoba, N. Y., July 21, 1885. 



SOCIAL WEALTH 



CHAPTEE I. 

INTRODUCTORY. 

No SYSTEMATIC attempt has ever been made to 
reduce to a science the phenomena which are pre- 
sented in social industry and the allotment of social 
wealth, which embodies the normal relations of the 
active agent, man, to nature and to the opportunities 
and potencies which the earth yields to his control. 
Only fragmentary parts of any history of industry 
are known to us, and nothing but the general features 
of its early development can now be ascertained. 
Society itself is biit an outgrowth of an industry 
which has really determined the character of social 
progress from stage to stage. The subjection of 
labor has meant, in every period, the debasement 
and destruction of the people. Through outrage and 
fraud industrial growth has been checked, and its 
power to elevate mankind thwarted and destroyed. 
The grossest ignorance and narrowest private self- 
seeking have alone sought to escape work and its 
duties, and the most brutal ambition was required to 
degrade and enslave it. 

Busied with the records of glorified conquest, the 
pomp of kings, and the displays of martial triumphs, 
the general historian has had but little to say of that 



8 SOCIAL WEALTH. 

industrial life of tlie people wliicli has sustained 
while it has had to suffer all the calamities of war. 
From the glimj)ses he has afforded us, however, we 
see clearly the subjected and enslaved condition 
which it has ever occuiDied ; a condition attempted 
to be justified by the casuistry of each apologist for 
tyranny, and even by political economists — that men 
will not work unless compelled to (by the lash or 
fear of starvation) ; thus making the unworthy desire 
for the product of another's labor the excuse for 
enslaving him, and the degradation resulting there- 
from the justification for its own j)erpetuation. 
Through every form of barbarism, feudalism, and 
civilism, industry has been mostly enslaved — much 
of the time in a gross material form ; always through 
force, fraud, and fictions of law and positive class- 
legislation. The savage, who at the same time sought 
excitement and sustenance in the chase, with feeble 
mentality left those inclined to work at liberty to 
perfect some product, since, whenever through lust 
or envy he desired, he could capture and appropriate 
it by taking the life of the producer. Under bar- 
barism, compulsory servitude became well-nigh uni- 
versal, and remains now, as ever, the distiuguishing 
trait of that stage of development. Here industry 
begins to assume some form of organization, and is 
directed with some order and sj^stem. Functions 
and powers were absorbed, and dominion assumed 
by the strong and cunning, and various castes were 
established to perpetuate the independence of a few 
and the subjugation of the industrious many. Under 
civilism, industry, as it became freed from the pecu- 
liar institution of slavery, evinces a greater tendency 



INTRODUCTORY. 9 

to organization, and under a system of bets or bribes, 
commonly called wages, effects " division of labor," 
and a power of production unknown to tlie earlier 
forms. But without any intelligent or equitable sys- 
tem of division of products, its results are scarcely, 
if at all, more beneficent, often resulting in wliat 
political economists call ove^^-production, as well as 
in the production of things which are non- wealth, or 
destructive to social well-being. The earlier and 
barbaric forms of slavery extend to our own time, 
and up to a quite recent date have existed in the 
most advanced nations. Slavery, the slave trade, 
and privateering, or warfare for plunder, were known 
as late as our fathers' time, and were the foundation 
of most of the large fortunes which are more than a 
half-century old. 

Civilism, thus far, has hardly done more than to 
refine and render more subtle the subjection of la- 
bor to lordly will. From conquests with bludgeons, 
swords and spears, as in the earlier ages, it has in- 
augurated a war of cunning and fraud, whose weapons 
are technical terms, shrewd devices, class legislation, 
and forms of law recognizing no rights as supreme 
but those of property and "the law of the market." 
But an era of science has at length dawned, and in- 
dustry stands revealed, though not yet popularly 
acknowledged, as the prime agent of all growth, and 
of every element in social refinement and progress. 
And in the absence of any system of economics which 
even recognizes the relations between human work 
and the complementary material agents, there arises 
a demand for an analysis of the elements of industry, 
which science shows to be the basis of all social 



10 SOCIAL WEALTH. 

economy and ethics. Careful investigation into all 
the motives to human action, the relation of man to 
the earth, the principle of conservation, by which 
accumulation is determined, as well as division, must 
have a place. There is required in this scientific 
age a systematic and thorough adjustment of the 
subject of industrial evolution. We have social, po- 
litical, and ethical systems as perfect as they can be, 
while our disintegrated and wholly empirical system 
of industry remains. We have no comprehensive, 
nor indeed comprehensible, explanation of the indus- 
trial phenomena by which the conscientious man can 
even guess when he has done his duty, or the moral- 
ist determine the simplest question thereunder. As 
little can the politician or civilian, however inclined, 
honestly decide whether certain measures will result 
in more good than evil, more happiness than misery, 
to mankind ; for the simple rea^son that religion, 
morality, and civilization are not the sources of 
human progress, but are the blossoms and fruitage 
of the social growth itself, which has its root in 
human industry.* 

Tlie industrial problem is therefore the funda- 
mental one. That the wealth of society is most 
unequally distributed is a fact so patent and univers- 
ally admitted that it is only necessary to call atten- 
tion to it. That the work which creates it is rewarded 
in no just proportion, but rather by an inverse ratio 
to its importance and utility, as well as to its severity 
and repulsiveness, is equally undenied and undeni- 



* " Where industry is wanting, there can neither be honesty toward 
men nor true worship of the Inlinite "Worker."— J. H. H'JNT. 



INTEODUCTOEY. 11 

able. The most arduous labor under our mixed 
economics * is usually the poorest paid, while often 
the light and trivial, and even the hurtful, is fre- 
quently rewarded with a fabulous income, t 

The only qualification ever associated with the 
universal admission of these statements is, that all 
have equal opportunity, and that since some work up 
from poverty to wealth, and take the great prizes in 
the business lottery or race, all can do so, and if any 
fail, it is their own fault ! Economists do not attempt 
to deny the inequalities of present division. They 
merely explain in a superficial way how the inequal- 
ity comes about, without reference to the fundamental 
cause, or even suggesting any change in the system 
which produces it, unless it be to apply a little 
more of the same thing — special legislation and class 
rule. 

But even the science of economics starts upon the 

* While claiming to be "an exact physical science," it treats " values" 
indiscriminately, whether increased or diminished by supply and de- 
mand, or by the interference of unreasoning executive or legislative 
will; by scarcity of a season, or the cornering of a market, or by any 
speculative conspiracy; by the natural laws of trade, or by the subject- 
ing to the rule of the market "by act of parliament" and "force of 
arms," things foreign to its sway; and whether relating to the com- 
modities which may be increased indefinitely, or to the buyer and seller, 
the men themselves, or to the land, of which no increased supply is 
possible. 

f " It is inequality in the wages of those who do the work of the 
world which calls for tlie attention both of students and statesmen, and 
inequality in what the wages will buy."— Edward Atkinson, 

By the latl.er he means that the man who gets the lowest wages 
pays the highest, tlie retail p?- ice, for what he buys. Attention is called 
for, also, to tlie disproportionate wages of those who do none of " the 
work of the world." 



12 SOCIAL WEALTH. 

ground that tlie real laws of trade tend constantly to 
equilibrium, or to a mean ratio, /. e., to the elimina- 
tion of profit and the exchanging of commodities at 
cost of j^roduction. " Fn^e competition," it is claimed, 
can alone secure, and will constantly tend to secure, 
equitable exchanges. Why, then, should indispens- 
able labor more and more be compelled to exchange 
itself for what itself has created, at a greater and 
greater disadvantage ? This is a question it makes 
no effort to explain, and, so far as the prominent 
writers are concerned, seems to be deemed unworthy 
of attention. Of course no process of exchanging 
equivalents could have produced the disparities we 
notice. No fair trade could have placed the values 
which each of two parties contributed wholly in the 
hands of one. No answer is furnished by the cur- 
rent commonplace, that it is accounted for by the 
superior industry and frugality of the one, and the 
idleness, extravagance, and dissipation of the other, 
for the successful are not more industrious, as a class, 
than the unfortunate poor, and by far are more given 
to extravagance and dissipation. But there is no 
eqiiaUti/ of opportunity under existing laws and cus- 
toms. In the race for wealth, which the economist 
seems as unable to define as to guide, the toiler is 
most heavily handicapped in the very start. It is 
quite true that one in a thousand or so, who has un- 
usual strength or cunning, distances his competitors 
and gets to take place with those more favored ; the 
disadvantages lessening as he Avorks to the front. 
But why should the weak be handicapped, while the 
strong carry no extra weight, but are helped on? 
The only reply vouchsafed is that " it has always 



INTRODUCTOEY. 13 

been so, and always will be." That men are found 
willing to do tlie most repulsive work, and even that 
which is deleterious to health and tends greatly to 
shorten human life, for wages less than that which is 
paid a superfluous clerk for services of trifling utility, 
proves that free competition has little or nothing to 
do with the adjustment of labor to place in the work- 
ing world, and that forced competitorship is only 
fully realized at the very bottom of the industrial 
scale. 

It is overlooked that a large proportion of the ex- 
changes which take place in the world are in nowise 
affected by the rule of the market, that each one shall 
get the most he can for what he parts with, while 
giving the least possible for what he requires. In- 
deed but a small proportion of the transfers in social 
life are subject to competitive offers at all ; and be- 
sides, in those transfers which are so subject, one 
party must yield to the other in each transaction all 
the 'profit which is realized by the other ; otherwise 
the exchange would be reciprocal, no matter what 
the nominal profit, and the benefit being mutual, no 
inequality could result. All services in the family, 
amounting to quite one-half of all labor, are non- 
competitive. In retail trade most prices will be found 
cicstomary rather than competitive, and whenever 
combination exists among dealers for reserved prices, 
competition ceases to operate altogether. 

Prof. Henry Dunning Macleod has written a book 
— -"Elements of Economics" — mainly to prove that 
value is wholly caused by " demand and supply," and 
that labor is " but one of the accidents of value and 
of wealth." From the standpoint of the trader this 



14 SOCIAL WEALTH. 

is very true, but from no other. It is by no means 
my intention to enter upon a fruitless discussion 
here of the origin of value, or of its true definitions, 
for the word has a score or more.* He suggests 
that a man might find a diamond worth a million 
dollars some lucky day, with very little labor ; though 
he must have known that the amount of labor, or 
product of labor, which some one is willing to give 
for it after it is found is what alone makes it val- 
uable ; and that if responsible parties would under- 
take to prodiice diamonds of equal intrinsic merit 
for the price of a day's labor, this diamond would 
bring no more. It is not the day's labor of the lucky 
finder which determines the price of this particular 
gem, but the unsuccessful thousands of days' search 
which are required before another like it can be 
found. To show that irregularity of demand and 
supply are the immediate and inciting cause of the 
fluctuation in prices proves little, since the supply 
which furnishes the market, and the means which 
alone make the demand effective, are both supplied 
by labor ; and a certain ratio would exist between 

* Value, as defined by economists, is the ratio between two or more 
exchangeable commodities, and is generally hmited to cost of produc- 
tion, or vibrates to either side by fluctuation of market. The specific 
value of a particular thing at a particular time and place is approxi- 
mately the cost of reproducing or replacing it in the market, rather than 
the actual cost of that identical article, which might have been excep- 
tionally great or small. I pointed out to Mr. Josiah Warren, nearly 
forty years ago, that profits, rent, and interest entered into "cost of pro- 
duction," and that while they have a warranty for being in our laws and 
customs, the enunciation of his formula "cost the limit of price," could 
have no practical effect except to direct attention to these strongly in- 
trenched wrongs. 



INTRODUCTORY. 15 

the two tilings exchanged corresponding to the 
amount of labor required to reproduce them if sold 
at a customary price to which there was no fluctua- 
tion. So that if " supply and demand " are the " sole 
cause of value," labor is the sole source both of the 
supply and of the means which makes the demand 
effective, or even possible. 

The triumph which Macleod claims over Adam 
Smith is not over his apothegm that " labor was the 
original price paid for all things," but over Smith's 
omission to show how it occurred, if his premises 
were true, that all social wealth came into the pos- 
session of those who do no labor. It is easy to see 
how this became so under a system of chattel slavery, 
because the laborers were owned by the capitalists, 
and all that was produced over and above the cost of 
the slaves' maintenance went to the slavelord by the 
custom and statutes of the times. Labor, which in 
this respect scarcely differed from the services of 
horses and oxen, in its economic aspect, was still the 
essential thing in all production and in all exchanges. 
Mr. Macleod is careful to point out that production 
"means placing any commodity in the market" at 
the time and place where the demand exists. 

The spirit of trade, or "law of the market," does 
not look further than this, and even contests the 
right of the true owner to reclaim goods when they 
have been once sold in open market by parties who 
had no title to them. But nothing can be more cer- 
tain than that commodities cannot be produced in 
market unless they have been transported and stored 
by labor, nor unless such other labor has been ap- 
plied to them as will render them desirable and 



16 SOCIAL WEALTH. 

fitted for consumption. While fully admitting that 
under our system of land-tenure and of commercial 
custom the distinctions he makes are logical if not 
profound, it is difficult to see the sequence of his de- 
ductions, or how they in any way affect the general 
proposition that " work is the parent of wealth ;" for 
although " incorporeal wealth," the " debts created 
by bankers with which to buy money and other 
debts," and the formation of knowledge, which he 
deems " the creation of loealth out of nothing,''' may be 
exchangeable and have price, it is only because that 
in the last analysis they can command labor, as a 
title to a slave, or of a superior cunning which can 
obtain labor without reward, carries with it the price 
of so much labor as it commands. He has elaborated 
his thought that wealth is constituted of a great 
number of things which have no connection with 
labor, " and that no change of labor or cost of pro- 
duction has any influence on value, unless they p7^o- 
duce a change in the relation of supply and demand." 
The italics are mine. Now, since this is precisely 
what labor always does ; that " intensity of demand," 
when effective, is wholly due to ove?'-production of 
the thing or things offered in purchase of commodi- 
ties ; and since the limitation of supply is caused by 
the wnc^er-production of that which is desired, he has 
established his " compound ratio," but which, how- 
ever important to a technical understanding of the 
fluctuations of prices, has no bearing whatever upon 
the more fundamental question as to the natural 
sequence of work and wealth. 

This author is equally exact and equally superficial 
in his statement that " wealth consists exclusively of 



INTRODUCTOEY. 17 

exchangeable rights ;" drawing no distinction between 
natural rights and legal rights, nor between individual 
and social wealth. He says, " Property is not a thing, 
but a right; it includes all kinds of rights which 
can be exercised over anything, and is equivalent to 
absolute ownership." It is hence legitimate to infer 
that he recognizes no rights but those of property ; 
and since he says, in the same connection (see book 
ii.,§61) that "jurisprudence is the science of rights," 
we are justified in concluding that neither in eco- 
nomics nor jurisprudence is there any place for the 
rights of man, or equities other than those connected 
with the control of property. Now, his main as- 
sumptions throughout can have no logical basis 
except upon the theory that all legislation and all 
governmental interference, as well as all customs, in 
whatever country, clime, or period, are scientific ex- 
ponents of rights. 

The former slave-holding oligarchy asserted that 
" that was property or rights which the law made 
so." But that these "elements of economics" work 
with the same facility with chattel slavery, and under 
every form of despotism, shows its value (not market) 
as a factor in political and social science. But we 
must not forget that this " science of dicker," as an 
able exponent once denominated it in my hearing, is 
only applicable to the "trade" side of commerce — 
that which is effected by competitive processes. As 
we have already seen, however, only a certain portion 
of exchanges are effected by that. For where combi- 
nation exists, as in the family or community, or 
among trade guilds, syndicates, or corporations, it 
does not operate. The highest salaried offices are 



18 SOCIAL WEAXTH. 

often awarded as favors, and among most institutions 
sinecures are abundant. Opportunity and place are 
accorded out of friendship, family relation, personal 
influence, etc., so that competition is the exception 
rather than the rule in nearly all human affairs, ex- 
cept in the employment of the most dependent and 
depressed labor, and in the practice of rack-rent. 
Even in trade a friend will give a friend the advan- 
tage over a stranger, and a dealer in stocks, or a 
gambler in securities or produce, will often give a 
personal favorite " points " that will enable him to 
evade the law of the market. There are " deadheads " 
in every train, in every conveyance, or place of social 
gathering. Its operation, even where most complete, 
among unskilled laborers, is by no means universal, 
and by no honest employment of language can be 
called/ree competition, as applied to them, since in 
selling his labor, the laborer, as we shall see here- 
after, is compelled to sell that which, on its passive 
side, is in the possession already of the party or 
class to whom he sells. 

As explained by Macleod, and even by Adam Smith, 
Eicardo, Mill, etc., economics embraces but a section 
or branch of social economy. It is as if a naturalist 
should treat of a tree, but make a thorough study of 
but a single branch or limb. This would give us a 
very good idea of the branch, but would not neces- 
sarily give us any knowledge of the character of the 
trunk, or of the root, or of their relation to the soil, 
from whose resources the branches had been grown 
and sustained through the root and trunk. It would 
be difiicult to proceed without some reference to 
these, however, and so the economists of the earlier 



INTEODUCTORY. 19 

school admit, in a general way, that labor produces 
all wealth, but omit to follow the thought to its 
legitimate conclusion, and suggest a number of ways 
in which values arise and wealth accumulates, in 
which labor is but an unimportant factor, if indeed a 
factor at all. 

It is upon the law of supply and demand that 
the whole science is now pivoted. This law, doubt- 
less, would operate as contended, provided the con- 
ditions existed and were all which existed or ef- 
fected exchange of services, commodities, or wealth. 
But the truth is that directly opposite conditions 
always exist, and that the assumed conditions could 
not possibly exist, except under circumstances which, 
it may be said, never or very rarely occur. As Mr. 
Thornton has elaborately shown, in his work on 
"Labor," the only circumstance under which sup- 
ply and demand could have the claimed opera- 
tion would be where all merchantable commodities 
were offered daily for what they would bring at 
public vendue, and where there ivas no reserve price. 
He has shown, moreover, that the great proportion 
of nearly every form of wealth is always held in re- 
serve, only the most perishable products being freely 
offered, and they are very often thrown into the river 
to remove a glut, but that labor itself is sold under 
wholly different conditions ; that for the laborer the 
law of supply and demand has a significance which 
it has and can have for no other dealer, inasmuch as 
while the ordinary dealer who may not be able to 
sell his stock to-day will be able to sell it to-morrow, 
often for more than he would have been willing to 



20 SOCIAL WEALTH. 

sell it for to-day, the laborer must sell bis labor 
to-day, or it is wholly lost.* 

From a different premise, but by a similar course 
of reasoniug, Karl Marx arrived at a similar conclu- 
sion. He showed that, lacking opportunity, land, or 



* Xot only does this assumed law of supply and demand utterly fail 
in its salutary effect upon labor denied the Use of the land while exert- 
ing to the full the baneful effects of a forced Qompetitiou in its operation, 
but upon land treated as property or capital it has an opposite effect. 
Increased demand not only, as with commodities, begets a temporary 
rise of price, but a continuous lise. Demand does not, as with com- 
modities, beget an increased, or any supply whatever. Thus, while 
prices of commodities fluctuate and recede as much or more than they 
have appreciated, through a brisk demand which stimulates production, 
the price of land goes constantly upward with increased demand, no 
production being possible or conceivable, except in regard to lanis trans- 
ferred from a general to a specific use. 

pt all commodities which can be held at a reserve price, land is the 
chief. It may be said it is always held so, the exceptions are so few. 
The reason is obvious. The land yields natural productions, and while 
labor is excluded from possession, it will gladly purchase the privilege 
01 gathering these products, or of applying itseli to the cultivation of 
more desirable products. The land is a more safe investment, and may 
be held "for a rise" with less risk than any commodity. It does not, 
like other commodities, deteriorate in quality or shrink in quantity. As 
a general thing, land is held everywhere for a rise. Where too much is 
attempted to be carried, it is true, parties may have to unload, and wlien 
mortgages are being foreclosed, or in business crises, there maj' be a 
break in value, but it will only last while the lands are passing into 
hands able to carry them. There is a considerable class of'- persons 
who often buy but never sell real estate. In every city, town, and 
village they are found, and indeed in all the country as well. Polit- 
ical economists insist on treating both land and labor as both capital 
and as commodities, yet the one, as we have seen, ii mainly beyond 
the law of supply and demand, and the other is subject not to a free 
but a forced competition. Could a more valueless science be invoked 
to solve any industrial problem? 



INTEODUCTOEY. 21 

capital to exert his force upon, the laborer could not 
compete, because his labor could not be freely applied, 
and that the competition to which he is subjected 
with others situated unfavorably as himself is not a 
free but 21, forced competition. 

This is also quite true, but the exact position is 
this : Labor, although the active factor in produc- 
tion, without land and opportunity, is abstract only, 
and as such can neither he bought nor sold. In working 
for an employer, it is not the labor which the worker 
sells, but the thing in which the labor has become 
concreted by its application to the land or to some- 
thing grown or taken from the land. Bastiat is right 
in saying " services only are exchanged." In the 
abstract this is true, but the services which have no 
tangible or visible vehicle fail of any material appre- 
ciation. And, however nearly abstract any service 
may be, place and opportunity, and the presence of 
a party needing and willing to pay for such service, 
are necessary factors in the exchange. 

Now, private property in land, not required by the 
owner for his use excludes labor from place and 
opportunity. There is no aim or logic for its exist- 
ence, indeed, but to effect this very purpose. Its com- 
mercial value dep)e7ids wholly on its power to prevent 
loorh. It could not otherwise create a forced com- 
petition between laborers. Certainly supply and 
demand can have no legitimate operation between 
two parties, one of which has full dominion over the 
land and the opportunity which both must improve. 
The one has his labor in such relation to external 
nature as that it can readily be wrapped up in every- 
thing desired ; the other has no place to bestow it, 



22 SOCIAL WEALTH. 

and it must lie sterile. His labor, until applied, has no 
purchasing poiver. It is as impossible for these two 
to compete as to exchange, for the thing to be acted 
upon and turned into a commodity is in the hands of 
the owner of the land and the opportunity, not of 
the worker. 

But suppose the landless man should hire or buy 
land of a third party and pay rent or interest to the 
amount say of one-half of what he could produce, 
how then could he compete with the other, who has 
no rent or interest to pay ? It will doubtless be an- 
swered that this rent or interest is what the owner 
of the land or money would obtain if he did no work 
at all, but merely let to others, and that consequently, 
as to the work he actually does, he stands on an 
equal ground with the other. This is, logically, 
much the same as the basis of Kicardo's theory of 
rent. How inadequate it is to the solution of any 
problem of industrial production seems not to have 
troubled the minds of any of the economists. 

It is true that the balance over that which the 
land-holder might have obtained as rent without 
labor determines the amount which, commercially, 
his labor realizes him ; but the utter fallacy of this 
assumption is seen the moment we reflect that when 
the laborer can get no employment, or opportunity 
to work whatever, and starves, the man who has 
access to the soil can live in comfort, although he 
gets no more with his persistent labor than if he had 
rented his land and taken the rent it yielded. Ac- 
cording to this theory, reduced to a naked absurdity 
in this instance, he would have obtained nothing for 
his work ; it would have been unproductive. Such 



INTEODUCTORY. 23 

induction from such premises, it seems to me, can 
have little interest except for those who are seeking 
justification for existing inequalities. Why the one 
should be protected by law in the ownership of 
thousands of acres, while the other is denied access 
to any, has no answer, economically, but that it is 
the law of trade ! The inability of political economy 
to grasp the problem of social industry and division 
of products now fully appears. 

It is assumed then that existing conditions and in- 
equalities obtain from the operation of the laws of 
trade. Nothing could be further from the fact. 
They are the results of barbaric custom, of class 
domination and legislation, and are upheld by no 
natural law of trade or natural law of any kind yet 
discovered ; and the wrongs of which the landless 
laborer so justly complains are wrongs inflicted 
and sustained by statutes regarding the tenure of 
land which have no basis in reason, and will be found 
to be as destitute of any foundation in the science of 
law as they are of any justification in the science of 
morals. It is worthy of note that Ricardo bases his 
theory of rent, and Malthus his theory of over-popu- 
lation, upon the same general ground, and under the 
shadow of a land monopoly, which keeps one-half of 
the soil of the British Isles uncultivated, assumes 
that the whole movement of society, trade, and pop- 
ulation, in condition as in numbers, is under the 
reign of natural law. Now, science can take no cog- 
nizance of statute law unless it be by comparing it 
with, and condemning it where it differs from, natural 
law. Yet our pseudo-economists treat all phenomena, 



24 SOCIAL WEALTH. 

under whatever arbitrary enactment or despotic ad- 
ministration, as of the same scientific value. 

It has, therefore, been my aim to trace historically 
the processes by which these inequalities have arisen, 
been perpetuated, and are at present sustained and 
made to appear rational. Science makes no claim to 
dominate and govern society, but it is under obliga- 
tion to define and classify phenomena of all kinds. 
It may not prescribe laws for the possession of the 
land, h^d it is bound to slioio luhat the natural relation is 
between man a7id the soil, the prime elements in social 
industry and social progress. 

In the development of industrial production, which 
is older than any written history, there have been 
three great epochs, interlapping each other in time, 
place, and circumstance, but still sufiiciently distinct 
from each other to admit of general analysis and 
classification. Not to speak of the cruder form of 
production in which the individual or primitive 
family engaged, or was directly interested, we begin 
with the communistic form, when the family extended 
to the tribe. This is undoubtedly the earliest form 
which has any social or historic significance. In its 
proper place we shall see that this was the funda- 
mental form by which occupancy of the land was 
regulated and determined. Under such form of 
necessity the production must have been communal, 
and was shared, more or less equitably, according to 
the degree of progress the tribe had made in intelli- 
gence and social advancement. Such progress, how- 
ever, was subject to great diversity of checks, and in 
many cases violently turned backward by tribal wars 
and conquests of warlike chieftains. And where the 



INTRODUCTOEY. 25 

longest peaceful periods were enjoyed, there was the 
liability of an arrest of the natural development of 
social law through the attachment to custom and 
tradition which shows itself so often in primitive 
communities and among subject races. As the 
boundaries of tribes extended they came in contact 
with other tribes, upon whom they made war or who 
made war upon them. Mutual destruction and the 
possession of the domain and goods was doubtless 
the purpose of these conflicts. The more warlike 
destroyed the weaker or less warlike, and appropri- 
ated their wealth, as formerly our farmers destroyed 
the bees to obtain their accumulated honey; but, 
like them, the warlike tribes soon learned a better 
way. We have seen, now, what we may class as the 
primitive form, both of "production and division hy 
usurpation.'''' Under this most discouraging state of 
affairs, however, production still went on, evincing 
the aptitude of mankind even in a savage or semi- 
savage state, for productive industry, notwithstanding 
the word of our teachers of economics and apologists 
for existing usurpations ; that unless the capitalist 
and landlord be assured of the lion's share in distri- 
bution they would not co-operate, and industry must 
cease. 

This form was superseded by another form, in 
which the lives of the conquered were saved, upon 
the condition that they would become the bond- 
slaves of the victors — they, and their clildren, and 
their children's children. This form may be termed 
chattelism. Under it production and division were 
quite simplistic problems. Its effect upon the in- 
crease of wealth was, no doubt, considerable in com- 



26 SOCIAL WEALTH. 

parison with tlie barbarity which it superseded, and 
which killed the worker to obtain possession of his 
product. It was in some respects more considerate 
to the vanquished, and much more convenient for 
the predatory class ; but it was less favorable to pro- 
duction than mi<^ht have been expected, for the 
worker before had the normal incentive to industry, 
the ^prospective possession of its fruit, and till the 
last the hope that he might escape the threatened 
doom. But as a productive worker, the slave soon 
sank to the lowest level known to industrial activity 
— so low that the lash became the resort to stimulate 
his flagging purpose. To this enslavement and usur- 
pation there was this justification, and this only. 
The victor could plead that he had saved the life of 
the vanquished, which was forfeited by the laws of 
barbaric war, and in consideration of which the 
victim gave his long-life service and also that of his 
posterity. 

This vestige of primitive " contract " appears as 
late even as the forming of our own Constitution, 
which contains the phrase "persons held to service," 
and under which slavery was perpetuated in our 
republic for nearly a century, and would doubtless 
have been in existence to-day but for the rebellion 
of the slave-power itself against the government 
which had so long shielded the system from the 
progress of modern thought and the logic of events. 
This is a circumstance which we should not fail to 
emphasize in our estimation of the forces which 
must inevitably disrupt or destroy our present sys- 
tem of capitalism unless the existing usurpations are 



INTRODUCTOEY. 27 

allowed to control wlioUy oiii' government and laws, 
or are in time wisely and peacefully abolished. 

To the slave system of production succeeded the 
feudal system. Successful chieftains had increased 
the extent of their sway by conquest, and kingdoms 
and empires were formed. The influence of the 
primitive community became weakened and modi- 
fied. Slavery became unwieldy, and the operation 
of Roman civilization became checked and hastened 
to dissolution, through its profligate prostitution of 
the civil law and of public trusts, to promote private 
advancement and personal dominion. With the ab- 
sorption of the lands by a class, it became an empire 
of slaves, citizenship retained no meaning, and only 
a debauched aristocracy remained. 

Under feudalism the slave became a serf, and was 
bound to the land and the landlord to him. He was 
recognized as entitled to protection under the law of 
the realm, and under the doctrine of the divine right 
of kings vassalage and villienage became the condi- 
tion of nearly all those who followed industrial pur- 
suits. This was the feudal system of production. 
Under this form certain kinds of industry flourished ; 
but other than a rude agriculture, they were those 
relating to war, or to the requirements of the church. 
This system gradually and silently disappeared with 
not so much as a notice from any historian till the 
time of Macaulay. To it succeeded the " competitive 
system," as we may call it for the want of a better 
name. Fourier denominates it industrial or com- 
mercial feudalism. Karl Marx calls it " capitalistic 
production." It is unimportant what we call it, if 
we analyze the thing itself and properly classify it. 



28 SOCIAL WEALTH. 

As tlie feudal system retained many of the elements 
of slavery, modified by the traditions, customs, and 
practices of the primitive communities, so capitalism 
retained the essential usurpations of feudalism, 
though professing to guard personal freedom, and to 
observe equity between the owner and the occupier 
of the land, the emj)loyer and the employed. Like 
slavery and serfdom, however, it relies wholly upon 
the "law of contract." This law we shall be under 
the necessity of analyzing, after we have inquired 
into the principle of law which underlies the appor- 
tionment, occupancy, and use of the land. It is well 
here to call atention merely to the significant fact, 
that although slaves were held under contract they 
were incapacitated from making any contract what- 
ever, not even marriage ; and that the serf was vir- 
tually in the same condition, being allowed to marry 
only within certain limitations and with the sanction 
of his feudal lord. We shall see, by and by, that a 
slave, serf, nor even the landless wage-worker, has 
any status which can enable him to make any con- 
tract which will be binding with respect to the 
division of the products of an industry in which he 
is mutually engaged with others. 

Though we have spoken of the several systems of 
industrial production, as they were dominated by the 
simple law of the strongest — as under slavery, as 
under hereditary rule in feudalism, and in our pres- 
ent system of capitalism, or rule of the market — there 
is and has been, in reality, but one principle about 
production under all of them — that of the employ- 
ment of human labor upon the soil, and the sponta- 
neous offerinf'S of nature. And in the cieation of all 



INTRODUCTORY. 29 

social wealth this has been co-operative. It is the 
method of division which has varied, but varied less 
than appears upon an ordinary presentation of the 
subject. For the proportion which goes to the 
worker has a remarkable similarity under these, to 
appearance, widely different systems. Nearly the 
same, and only the same, proportion goes to the 
wage-worker now as went formerly to the serf or to 
the slave. We have no reliable data, it is true, as 
to what portion of the slave's production was usually 
required for his support, but we have the authority 
of Hallam that the laborer of his generation was 
" much inferior in ability to support a family to his 
ancestors three or four centuries ago" (Middle Ages, 
p. 500). And he quotes Sir John Cullum as saying : 
" In the fourteenth century a harvest man had 4d. a 
day, which enabled him in a week to buy a comb of 
wheat ; but to buy a comb of wheat now (1784) a man 
must work ten or twelve days." He further says: 
"So under Henry YIL, if meat was a farthing and 
a half, which I suppose was about the truth, a laborer 
earning 3d. a day, or 18d. in the week, could buy a 
bushel of wheat at 9d., and 24 lbs. of meat for his 
family. A laborer at present (1817) earning 12s. a 
week can only buy a half bushel of wheat at 10s., and 
12 lbs. of meat at 7d." He points out that in conse- 
quence of the improvements in manufactures certain 
commodities had become proportionally cheaper, but 
on the whole concludes as above quoted. 

But while it is true that great progress has been 
made in improvements in machinery, in the processes 
of various industries, and the production of wealth, 
it is also too true that poverty has extended its 



30 SOCIAL WEALTH. 

borders in equal, if not increased, ratio. It may be 
said tliat "the craftsman now lodges and fares better 
than the feudal lord ten centuries ago, or the bar- 
baric king of an earlier period ;" yet still the propor- 
tion he shares of what his labor creates is less than 
that which the Saxon Gurth enjoyed ; and what is 
worse, is denied at times the oj^portunity to work at 
all. The wealth which the lord of land or of capital 
now acquires from the productions of labor is pro- 
portionately greater than that which success ever 
gave to the military chieftain, to the slave-holder, or 
to the feudal baron. That political economy, as de- 
fined by the latest school, applies equally well to 
each of these systems of production and division 
should show us how inadequate it is to even treat, 
much less to solve, the industrial problems which 
are now pressing for elucidation. 

One of the first, if not the very first, of economists 
who were prominent in the public life of our nation 
fifty 5^ears ago — John C. Calhoun — was a slave-holder 
who religiously believed slavery to be not only right, 
but the only safe relation between " capital and la- 
bor." He foresaw, and correctly foretold, that the 
abolition of slavery would lead directly to the conflict 
between labor and capital which now confronts us.* 
We must look to a broader sphere of thought than 

* In 1835, under liis teachings, the Charleston Baptist Association, in 
Its report, said it " did not consider that the lioly scriptures had made 
the fact of slavery a question of morals at all. The question is one 
purely of political economj', viz.: Whether the operatives of a country 
shall be bought and sold, and themselves become property as in South 
Carolina, or whether they shall be hirelings, and their labor only become 
property." 



INTRODUCTORY. 31 

that of political economy, wliicli is ' constantly nar- 
rowing, before we shall find any satisfactory reason 
or explanation for the gigantic accnmulations of 
wealth in the few hands, and the growing pauperism 
among the people wherever the tenure of land and 
the law of the market coincide to multiply accumu- 
lations of wealth by a " duplicate geometrical ratio," 
while labor can only increase production by "equal 
differences." 

That the tendencies which conspire to create the 
inequalities of condition, and utter subjection of 
labor to the power of capital, are traceable ultimately 
to private property in land, as at present interpreted 
by law and custom, there can now remain no rational 
doubt. Mr. George, in his "Progress and Poverty," 
has shown it in his masterful way, though he does 
not see that it is now a tool of capitalism merely. 
His work has become so widely known, and so gen- 
erally read, that I may be saved the necessity of 
making any argument upon that head. Mr. Wallace 
and Mr. Clark have also directed attention to the 
same question, in a manner to leave the matter in no 
doubt, and I will not take the labor of proying at 
length what is so generally acknowledged to be true. 

To the perhaps less obvious truths respecting the 
modes of obtaining wealth without service, the nature 
of the productive factors, and the ratios involved in 
procuring and apportioning social wealth, we need 
to apply the most careful attention and bring the 
utmost candor. For upon these qualities of mind 
everything in the investigation of social questions 
depends. 



CHAPTEE IT. 

ECONOMIC SCHOOLS : A BKIEP REVIEW OP THEIR ORIGIN 
AND GROWTH. 

As A science, or branch of science, political econ- 
omy is little more than a century old. The term is 
said to have been first used by Quesnay, a French 
philosopher, who published a volume in 1758, no 
copies of which, however, are now extant. Previous 
to that a doctrine known as "the balance of trade" 
had obtained among the savants of Europe, and ex- 
erted a wide and powerful influence over the govern- 
ment and fortunes of nations for nearly two hundred 
years. Spain and Poland especially favored it, and 
by cruel laws and frequent wars sought to retain 
within their dominions the money of commerce — the 
precious metals. More than one -fourth of the whole 
time is said to have been spent in destructive wars, 
which are noticed in superficial history as dynastic 
and religious wars, but which were in the supposed 
interest of that control of commerce which would 
bring the money from many countries into one. 

The doctrine was briefly that " such commerce only 
was valuable which brought money into a country," 
and that in exchange one side necessarily gained 
and the other lost. During its prevalence, however, 
Spain sunk from the first to a fourth or fifth rank 
among the nations, and Poland lost its national ex- 
istence. ^' 



ECONOMIC SCHOOLS. 33 

Quesnay was the first writer who combated this 
doctrine by anything like a systematic method. He 
laid it down as a maxim that " nations are interested 
in the prosperity, and not in the destruction, of their 
neighbors." A school of philosophers was immedi- 
ately formed who adopted in the main his teachings, 
and, according to Macleod, " reflecting upon the in- 
tolerable misery they saw around them, struck out 
with the idea that there must be some great natural 
science, some principles of eternal truth founded in 
nature itself, with regard to the social relations of 
mankind, the violations of which were the causes of 
that hideous misery they saw in their native land. 
The name they gave this science was Natural Eights, 
and their object was to discover and lay down an 
abstract science of the rights of men in all their 
social relations . . . toward government, toward 
each other, and toward property " (Elements of Eco- 
nomics, p. 64). 

To v>^hat extent the promulgation of their views 
operated to change the attitude of the French people 
toward their government would prove an interesting 
inquiry, but it is not proposed here. Eroedom was 
their ruling maxim — freedom of person, of opinion, 
and of trade between individuals and nations. It 
seems that Turgot, who was for a time the controller- 
general of Louis XVI., and an eminent disciple of 
his school, would have been able to turn back the 
threatened revolution, if his king had enabled him 
to carry out his plans for reforming the civil and 
financial systems he found enthroned in France more 
securely than monarchy itself. He was allowed to 
hold his position only about a year and a half, when 



34 SOCIAL WEALTH. 

he was abandoned by tlie king, who at the same time 
expressed the opinion that the only persons who 
sought the welfare of the people were Turgot and 
himself. 

A writer of note says, in regard to this : " If the 
nobility and privileged classes had possessed enough 
of foi-esight and patriotism to submit to his plans of 
reforming France, she might have been spared the 
horrors and excesses of the revolution. But his pro- 
jects for the public good were defeated by the con- 
federacy formed against him by the nobles, the 
courtiers, farmers of the public revenue, and the 
financiers." 

This first school of economists recognized that 
man's physical and social wants lead him to live in 
society of equals in a state of " peace and good will," 
and to recognize that others, with the same wants as 
himself, cannot have less rights than himself, and 
that he is therefore bound to respect those rights, so 
that he may have the same observed toward himself. 
They held that wealth was derived wJioUy from the 
produce of the land, and consisted of that which was 
in excess of the cost of production, or that which 
was consumed by the labor producing it. Labor 
employed in obtaining products from the land they 
considered the only productive labor, and held that the 
wages of all others were paid from this source. In 
exchange they held that neither side gains, and they 
excluded labor and credit from their definition of 
capital, although at the time chattel slavery was 
common among the nations. This school was estab- 
lished upon a half truth. They recognized the land 
as the basic element in economics, but failed to see 



ECONOMIC SCHOOLS. 35 

tliat only Avlien joined to labor it was a factor in the 
production of wealth. 

But there soon sprang up a second school of econ- 
omists, holding, like the first school, to freedom of 
commerce, but denying that mechanic arts and trade 
do not contribute to enrich a nation. They con- 
tended, also, that there is a gain to both sides in 
commerce. Adam Smith, the leader of this second 
school, made labor the basis of all wealth, as the first 
school had made the land, and therefore comple- 
mented their main theory. This school took up the 
theory of value, and developed the general idea of 
supply and demand in its operation to promote or 
regulate the fiuctuations and adjustments of prices. 
Adopting also their idea of wealth as arising from 
the mutual wants of people, and as consisting of the 
exchangeability of things, Smith laid it down as an 
axiom, that "the real price of everything — what 
every thing really costs to the man who wants to 
acquire it — is the toil and trouble of acquiring it. 
What everything is really worth to the man who has 
acquired it, and who wants to dispose of it, or ex- 
change it for something else, is the toil and trouble 
which it can save to himself, and which it can impose 
upon other people. What is bought with money or 
goods is purchased by labor as much as what we 
acquire by the toil of our own body, . . . and its 
value to those who possess it, and want to exchange 
it for some new production, is precisely equal to the 
quantity of labor which it can enable them to pur- 
chase or command." 

But neither school clearly grasped the whole truth 
— that it is the union of these tivo agents or factors 



36 SOCIAL WEALTH. 

which produces all material goods. The system, of 
which Smith gave the substantial rudiments, was 
widely departed from, in certain particulars, by 
Ricardo, Malthus, Mill, and others, without, how- 
ever, in any way inquiring into the natural relation 
between the land and the occupier, or into any 
equitable system of division of the products of in- 
dustry. If they did not assume that wages, rent, 
and profits were a just and equitable system of 
division, they ignored their obvious inequality and 
monstrous injustice ; and if they did not assume that 
the unrestricted dominion of the land as established 
by civil law, was true and in accordance with the 
natural relation, they virtually treated it as such, 
and were wholly silent as to any other theory of 
land ownership than the capitalistic or feudalistic. 

From this remark must be excepted, however, the 
later Mill, Prof. J. E. Cairnes, and some later writers 
of less note. And the truth is that the strict trade 
economists found no practical method of evading 
longer this manifest tendency to the investigation of 
more fundamental questions ; but by narrowing the 
scope of the science to the single matter of exchange. 
Professor Perry, our own countrj'man, Macleod of 
England, and M. Eouher of France, are representa- 
tive men of this later school of economists. Macleod 
says : " This view has now become general among 
the most recent and advanced economists in Europe, 
who are too numerous to name — that pure economics 
is nothing but the science of exchanges." 

It is useless now to object to this limitation of a 
science so broad in its inception, and which embraced 
isonomics, or law of equal privilege, as well as econ- 



ECONOMIC SCHOOLS. 37 

omy. But wliat is open to objection and severe 
reprehension is that when so limited it should treat 
all phenomena in regard to property and trade as natural, 
however determined hy arbitrary domination, or by 
the operation of barbaric custom and unequal laws. 

Because, if we follow the teachings of this later or 
third school, in accepting the theory that supply and 
demand is the cause of value (although really but an 
incident in the fluctuations of the market price) there 
arises all the greater necessity for dealing in an inde- 
pendent way with those things which the reformed 
science excludes, viz. : The work and the worker, and 
their relation to each other and to the earth, as well 
as to the system of division of the products of social 
industry. For these exist back of all trade, and of 
the " varying relation of economic quantities " to 
each other, which, according to this school, " defines 
and limits the inquiry." Surely if so narrow a 
specialty requires the appropriation of an entire 
science for its elucidation, the relation of the man to 
the elements upon which his life and labor depend, 
as well as the undisturbed enjoyment of the products 
of his activity, demands an inquiry and the forming 
of a science of social industry applicable in every 
social arrangement. And certainly it will not be 
permitted to a science of such special scope as eco- 
nomics has thus become, to determine and conclude 
any controversy beyond the sphere of trade, espe- 
cially not to decide the claims of labor adversely by 
simply ignoring them, or by assuming them already 
determined by the crude institutions derived from a 
wholly unscientific and barbarous age. It is also 
plain, from what has been quoted from a " Pure 



38 SOCIAL WEALTH. 

Economist," tliat the view of tlie originators of the 
science, the first school, was far more broad and 
humanitary, and aimed at nothing less than " to dis- 
cover and lay down an abstract science of the natural 
rights of men in all their social relations." Now, 
since " Economics " has abandoned that field alto- 
gether, and confined itself to the treatment of a single 
branch of the subject, the question of value, by what 
logic can it assume to prejudge those broader and 
weightier questions which itself has positively ex- 
cluded ? 

I should notice in this connection the existence of 
a partially retrograde school of economists, which is 
mainly represented by the works of Henry C. Carey. 
It was in some respects a protest against the studied 
neglect, by the writers of the second school, of the 
industrial question and of the rights of labor. To a 
certain extent he rehabilitated the old doctrine of 
the " Balance of Trade," and with good reason in 
view of the abandonment of the whole industrial side 
of the equation by the other schools. Whether both 
parties to an exchange gained, or whether neither 
gained, or whether the one gained and the other lost, 
between nations or individuals, would depend mainly 
upon the equity of the exchange, rather than upon 
any relation of suppl}^ and demand. Not the " bal- 
ance of trade," but the " balance of profits," would 
determine the ratio in which the one would succeed to 
affluence and the other be reduced to poverty, and to 
wliich abundance of supply and intensity of demand 
would give no solution or even intimation. Protec- 
tion against such result was not only a just aim, but 
an imperious necessity to save industry from a con- 



ECONOMIC SCHOOLS. 39 

stant despoliation of which neither school so much 
as acknowledges the existence. 

We can only deplore the wholly impotent remedies 
offered by Carey for the disease he so clearly under- 
stood. His elementary principles are greatly clouded 
by the delusive mirage which befogged his mind in 
regard to foreign trade, and the workings of a tariff 
upon the productions of other lands. The necessity 
of a more thorough and comprehensive system of 
investigation than any of these schools affords must 
be now apparent to the most careless reader. 



CHAPTEE III. 

EISE AND GROWTH OF CAPITALISM. 

The progress of the human race is effected by the 
operation of two forces which correspond in most re- 
spects to what in physics are often called, for Avant of 
better terms, the centripetal and centrifugal forces. 
These are the forces of convergence and divergence, 
the one tending to concentration of powers and prop- 
erties, and the other to their separateness or the in- 
dependence of parts. Socialism and Individualism are 
to appearance conflicting, though in reality comple- 
mental, in their relations to the societar}^ movement. 

Capitalism has its rise in the early and erratic 
stage of these movements and grows out of the irregu- 
lar action of these forces. By itself. Individualism 
seeks the private good to the neglect of society, and, 
uncomplemented, to its ultimate disruption. By 
itself. Socialism seeks the collective good, to the neg- 
lect and ultimate subjection of the individual. Be- 
tween these two forces, and while their play is inhar- 
monic, the capitalistic tendency becomes developed, 
employing the license of the individual to sequester 
the social wealth, and convert the social forces into 
means for the subjection of other individual workers. 
Under the usages and regulations of aggressive war 
it seizes the laborer and reduces him to the condition 
of a slave. By more gradual means it assumes do- 



RISE AND GROWTH OF CAPITALISM. 41 

minion of the land by steady approaches. Anon it 
courts the individual and leans toward personal 
freedom, and, as it acquires exclusive control of the 
counter-element, the land, relaxes its hold of the per- 
son of the laborer. It now gathers to itself the social 
and civil powers, and, to make its dominion of the 
land absolute, lauds at the same time the personal 
freedom of the individual and the divine origin of 
the state. Thus unlimited freedom to extend and 
absorb earthly possessions, inviolability of contract, 
however formed or assumed, became the great watch- 
words and signs by which it conquered. 

And thus it has played the social force against the 
individual, and again the individual right against the 
social claim, whenever the state has attempted to 
limit or regulate its rapacity. It now approaches 
the seat of civil power, in order to enlarge its privi- 
lege, and converts public trusts to private ends. In 
modern states it purchases the courts and legislatures, 
and where it cannot directly accomplish this purpose, 
pleads for protection and exemption from the law of 
competition which it prescribes for the worker. 
While obtaining high tariffs and princely subsidies, 
it takes occasion to warn the government that noth- 
ing is required to benefit the condition of labor, but 
to enable capital to give employment ; that having 
freedom to choose his calling and power to have en- 
forced his contracts, the laborer should be satisfied. 
In the testimony before the Senatorial Committee on 
Education and Labor, noted capitalists,"'^ in giving 



* The testimony of John Roach and Jay Gould, as referred to above, 
particularly emphasized the necessity that government should favor and 



42 SOCIAL WEALTH. 

their life experience intimated tliat all workers lia\e 
the " chance " to become millionaires, and perhaps 
this would be true if subsidies and the winnings of 
gamblers could have universal application. But it is 
for private advantage and plunder of the public that 
subsidies are sought or gambling is inaugurated. 

Capitalism continues true to its origin and name. 
It seeks to bring ail things to or under one head and 
to monopolize the sources of production. In poli- 
tics it is monarchy, not such as the effete institutions 
now support, but as it appears in an Alexander or a 
Napoleon. It employs all the military powers of the 
stale and all civil and di^Dlomatic trickery to reduce 
all men and all nations to its sway. It does not 
tolerate equality or the existence of equals. " The 
universe cannot retain two suns." No sooner have 
Octavius and Anthony put down the conspirators 
than they try issues with each other. This may be 
said to be the sum of military careers, the establish- 
ment of unlimited power in the hands of one. It is 
the same with capitalistic careers. 

In trade the instruments and maxims only are 
changed. The spirit is the same, and the purpose 
to reduce the world to the payment of tribute is 



protect capital, but that labor, under our equal laws, had everytliing it 
could reasonably ask. The latter-named gentleman, in a previous ex 
amination before a legislative committee of the state of New York, in 
1872, speaking of his action politically, had said: ''I do not know how 
much I paid in helping friendly men. We had four states to look 
jiftcr and we had to suit our politics to circumstances. In a Demo- 
cratic district I was a Democrat, in a Republican district I was a Re- 
publican, and in a doubtful district I was doubtful ; but in every dis- 
trict, and at all times, I have alwo.ys been an Krie mm." 



EISE AND GROWTH OF CAPITALISM. 43 

scarcely changed in form. Our millionaires, witli 
less personal courage, liave found a safer metliod of 
subjection and pursue it witli as little scruple as did 
tlie ancient chieftains. 

-Trade, as we have it in bargain-making, is the di- 
rect successor of violence in warfare. To illustrate 
this I cannot do better than quote from Henry Sum- 
ner Maine : 

'* In order to understand what a market originally 
was you must try to picture to yourselves a territory 
occupied by village communities, self-acting and as 
yet autonomous, each cultivating its arable land in 
the middle of its waste, and each, I fear I must add, 
at perpetual war with its neighbor. But at several 
points, probably where the domains of two or three 
villages converged, there appear to have been spaces 
of what we should call neutral ground. These were 
the markets. They were probably the only places at 
which the members of the different groups met for 
any purpose except warfare, and the persons who 
first came to them were doubtless, at first, persons 
specially empowered to exchange the produce and 
manufactures of one little village community for 
those of another. Sir John Lubbock, in his recent 
volume on the ' Origin of Civilization,' has some in- 
teresting remarks on the very ancient association be- 
tween Markets and Neutrality (p. 205) ; nor can I 
help observing that there is a historical connection 
of the utmost importance to the moderns between 
the two, since the jus gentium of the Koman praetor, 
which was in part originally a market law, is the un- 
doubted parent of our international law. But, be- 
sides the notion of neutrality, another idea was 



44 SOCIAL WEALTH. 

associated with markets. This was the idea of sharp 
practice aud hard bargaining. The three ideas seem 
all blended in the attributes of the god Hermes, or 
Mercury — at once the god of boundaries, the prince 
of messengers or embassadors, and the jjatron of 
trade, of cheating, and of thieves" (Village Com- 
munities, pp. 192, 193). 

From the fact tliat in their domestic relations the 
primitive groups give feeble play to the principles of 
trade, he says : " Competition, that prodigious social 
force of which the action is measured by political 
economy, is of relatively modern origin. Just as the 
conceptions of human brotherhood and (in a less de- 
gree) of human equality appear to have passed be- 
yond the limits of the primitive communities and to 
have spread themselves in a highly diluted form over 
the mass of mankind, so, on the other hand, compe- 
tition in exchange seems to be the universal belliger- 
ency of the ancient world which has penetrated into 
the interior of the ancient groups of blood relatives. 
It is the regulated private war of ancient society 
gradually broken up into indistinguishable atoms. 
So far as property in land is concerned, unrestricted 
competition in purchase and exchange has afar more 
limited action even at this moment than an English- 
man or American would suppose. The view of land 
as merchantable property, exchangeable like a horse 
or an ox, seems to be not only modern, but even now 
distinctively Western" (Y. C., 227, 228). 

Where the older forms of usurpation exist and 
the ruder despotism prevails there is less necessity 
for complete capitalistic control of the land, but with 
the dying out of those forms, and as they 3aeld to 



RISE AND GROWTH OF CAPITALISM. 45 

the progress of modern thought, privilege, with the 
instinct of self-preservation clutches at the dominion 
of the land, and through the reduction of that ele- 
ment to the status of a commodity and the competi- 
tive struggle for its possession, renews its waning 
strength and extends its endangered power. In the 
United States this principle is wholly unrestricted 
and its dicta are universally accepted in all business 
circles. In England an effort is being made to form 
into general law the rule of the market so as to do 
away with the obstacles to " free trade in the land." 
In continental Europe, with the exception of France, 
it has not yet taken on distinctive form, and is less 
and less defined as we approach the countries gov- 
erned by absolute power and the traditions of earlier 
times. 

To reduce land to the state of a commodity, so as 
to profit by its relation to production, and to force a 
competitive struggle for its use, the spirit of capital- 
ism has contrived to win victory from defeat. And 
thus the market has brought the occupancy of the 
land under its rule, and developed what under no 
other rule could have been effected, a competitive 
rent, forced by the necessities of the cultivator to 
obtain the privilege which naturally is his. 

" The right to take the highest obtainable rent for 
the land is, as a matter of fact and as a matter of 
morality, a right derived from a rule of the market. 
Both the explanation and the justification of the ex- 
ercise of the right in England and Scotland is that 
in these countries there really is a market for land. 
Yet it is notorious that in England, at all events, land 
is not universally rack-rented. But where is it that 



46 SOCIAL WEALTH. 

the theoretical right is not exercised ? It is sub- 
stantially true that where the manorial groups, sub- 
stituted for the old village groups, survive, there are 
no rack-rents. What is sometimes called the feudal 
feeling has much in common with the old feeling of 
brotherhood which forbade hard bargains " (V. C, 
199.) 

That rack-rent and the taking advantage of the 
necessities of others to drive unequal bargains was 
transmitted from the early times, and originated in 
the common antipathy to strangers or outsiders, and 
so inconsistent with the fraternal feelings which ob- 
tained in more primitive communities, there remains 
no doubt. In the Ancient Laws of Ireland, as quoted 
by this author, " the three rents are rack-rent from a 
person of a strange tribe — a fair rent from one of the 
tribe — and the stipulated rent, which is paid equally 
by the tribe and the strange tribe." Competition 
rents could only arise by regarding the letting and 
hiring of land as a purchase or sale for a period of 
time, with the price spread over that period. He 
proceeds to add that " if the writer [of treatises on 
political economyj had always recollected that a 
competition rent is, after all, nothing but price j)ay- 
able by instalments, much unnecessarily mysterious 
language might have been spared, and some doubtful 
theories as to the origin of rent might have been 
avoided." 

The motive in exacting a competitive price for 
rent, or any exchangeable thing, is the reverse of a 
fraternal or friendly impulse. It is always attempted 
to be justified by specious reasonings and baseless 
assumptions. It is antagonism, not mutualism. Be- 



RISE AND GKOWTH OF CAPITALISM. 47 

tween tlie advantage taken of another's necessities to 
drive a sharp bargain, there is only one step to an 
act which shall reduce that other to a dire neces- 
sity, in order to increase the advantage to be realized. 
This step is taken whenever, under the false assump- 
tion that land is a commodity, proprietorship of it is 
claimed either by direct usurpation, or under the 
pretense of purchase, to the exclusion of those who 
need to occupy it. It is this step which constitutes 
capitalism. Free competition, indifferently em- 
ployed, may embrace, possibly, the obtaining a bet- 
ter price from another's distress. Capitalism is the 
systematic reduction of the many to want, that ad- 
vantage may be taken of their needs. 

But such result springs, as we have seen, from the 
erratic play of the primal forces. With the harmonic 
and complemental action of the individual and social 
aims, there could be no place for capitalism, and 
with the advent of mutual co-operation, and recipro- 
cal exchange, and the disappearance of artificial 
capital, wealth would be more generally distributed 
and greatly increased. With the broadest liberty to 
the individual, society would exist to guard the equal 
rights of all, and thus secure its own stability and 
progress by promoting the well-being and normal 
development of each member, 



CHAPTER IV. 

UNEARNED INCREASE. 

The sources of unearned increase or income may 
properly be divided into tliree categories from the 
especial sources from wliicli they are derived : 

First. Profits^ — derived mainly in process of the 
exchange of commodities. 

Second. Interest — derived from the loan of money, 
or of forms of capitalized wealth other than land. 

Third. Rent — derived from the privilege to use 
the land, or to occupy dwellings and other improve- 
ments upon the land. 

Profits arise mainly in the process of exchange. 
When two attempt to effect a transfer of two com- 
modities with each other, there is quite sure to arise 
a question as to how much of one shall be exchanged 
for a certain amount of the other ; and exactness as 
to values, even if both were desirous of dealing fairly, 
would be difficult to determine. But their agree- 
ment is supposed to fix the ratio with some approach 
to equity. And the accidental advantage which either 
might attain is very likely to be reversed in the next 
transaction, and consequently could hardly be classed 
with profit. When, however, a third party enters 
into the transaction, and becomes a go-between for 
two or more parties with commodities to dispose of 
for other commodities, the matter of profit first pre- 

48 



UNEARNED INCREASE. 49 

sents itself in a distinct form. The merchant is the 
representative man of profits, as the banker is of in- 
terest and the landlord of rent. 

Let ns take it up and analyze it carefully. "We will 
take a most simple instance, that no confusion may 
arise from the introduction of lateral questions. 

A farmer raises potatoes and a shoemaker makes 
shoes. It is convenient for each to store them with 
the merchant of their village, who will be in a certain 
way the one to determine how many potatoes the 
farmer who wants the shoes shall give for them to 
the shoemaker who wants the potatoes. Even if 
money is used in each of the transactions, the opera- 
tion is the same. Taking it for granted that, as be- 
tween the farmer and shoemaker the exchange is a 
tolerably fair one, what rule determines the compen- 
sation of the merchant? The economist will answer 
that he has done to both a service, and the compen- 
sation is to be determined by competition, as is the 
price of the potatoes and of the shoes. And while 
all stand on an equal footing, there seems no objec- 
tion to this determination. By this rule the farmer 
is paid for his labor in raising and bringing the 
product to market ; the shoemaker, for his labor and 
material in the shoes, and the merchant for his 
service in the exchange. But under free competi- 
tion he would not be likely to receive more for his 
services than each of them in proportion to the time 
employed, for certainly the work is not more labori- 
ous or repulsive than theirs. But even if he did, it 
would still be his wages, and not a profit — for that 
means something beyond the payment for services 
rendered. But would it be right that he be paid no 



50 SOCIAL WEALTH. 

interest on Ins money employed in business, and on 
the rent of the premises he requires for business? 
But if he parts v/ith a portion of this compensation 
for interest on borrowed money, and as rent for a 
hired store, he still has made no profit ; and it may 
happen a part of even his fair wages for the service 
he has rendered goes the same way. Besides, the 
others also employ means in their business. There 
is evidently, then, no room for profits here. Besides, 
there is more or less risk in all mercantile enter- 
prises, and still another portion of his earnings may 
have gone justly for assurance. 

However liberally the merchant under such cir- 
cumstances might sometimes be paid, it is very 
evident that no great disparity could long exist in 
the compensation of these several callings, did not 
some other factor enter into the calculation. Under 
free competition the pay of each would certainly 
tend to equality. Besides, the merchant is placed 
in a position to know better than either of the others 
the marketable value of the articles, and of his own 
services, and more intelligence in these respects is 
rightly expected of him. Now, whatever his decision 
in the matter of the compensation may be, he must 
decide his share to be either wages or profits, or else 
both as wages and profits. That he cannot charge it 
wholly as profits, is seen from the fact that he would 
relinquish, then, all claim for services, and would be 
guilty of taking " something for nothing," and playing 
falsely with matters entrusted to his decision. But 
if he is paid for his service, by what pretense does 
he also charge up profits against his customers? or 
how, under a system of natural competition, would 



UNEARNED INCREASE. 51 

he be able to do so and yet succeed in being em- 
ployed ? 

In the prosecution of a business other than mere 
trading, where labor is employed and material worked 
up into new forms and new utilities result, there is 
a greater complexity of transactions and interests, 
but they all are reducible to the same terms. These 
are the services which the operator performs for the 
producer of the material, the laborer, who has his 
labor only to sell, the machine or tool maker, etc. 
In the parlance of the economists, he purchases all 
these and sells them in the commodities thus pro- 
duced and sold. Now, in all this he either performs 
a service to those from whom he purchases and to 
whom he sells, or he does not. If not, he can make 
no just claim to compensation whatever, and in any 
truly competitive struggle would be unable to receive 
any. If recompensed for his services, any claim for 
profits must be fraudulent and unjust, for no one can 
be paid twice for the same work and be innocent. 
If he has employed hired money, factories, or lands, 
and paid interest and rent for them, so may those 
with whom he has dealt, and the moneys he has ab- 
sorbed from his business to meet these obligations 
are not profits ; and however he may be leagued with 
the banker and landlord, it is not as an operator or 
merchant that the profit is taken, but as a banker or 
landlord, or as a conspirator with one or both of 
them. 

It is easy to anticipate the protest which will be 
raised against bringing morals into economics, and 
such is not my intention, farther than they are in- 
volved in civil law and social economy; but it may be 



52 SOCIAL WEALTH. 

well to remind critics thus captious, that the highest 
moral quality, Truth, is essential to any scientific 
investigation whatsoever. If we may not know the 
truth of any transaction we are in no position to de- 
cide any question in regard to it. It is evident that 
profits which depend upon falseliood, deception, sup- 
pression of facts, misrepresentation or adulteration, 
or upon false claims and pretenses, can have no place 
in any scientific inquiry. With these elements 
eliminated from business transactions, it is quite 
plain that nothing would remain to the trader but 
payment for his services. Exchange is a social, not 
a private affair, and in the transfer and distribution 
of commodities, the entire process is the result of 
attempts at mutual and reciprocal interchange. It 
may be to the private interest of the trader to ob- 
struct, as trade is now conducted, forestall and corner 
the concurrent tendencies to exchange. It certainly 
is the interest of the whole people that such private 
interests shall be thwarted as far, at least, as a pro- 
mulgation of the truth will have that effect, and here, 
really, the provin-^e of the scientist ends. It may be 
well to refer, in this connection, to the fact that this 
fear of moral sentiment, by writers on political econ- 
omy and civil law, is wholly too one-sided to be 
treated with the least respect ; for while it deprecates 
the interference, in any way, of ethics against the 
"law of the market," and the right to obtain all one 
can of advantage in a trade, it whines like a whipped 
school-boy about the " sacred rights of property," 
and " the inviolability of contract," whenever its as- 
sumed prerogatives are questioned. It is significant 
that our courts will cite with deepest unction the 



UNEARNED INCEEASE. 53 

Golden Rule, wlien riglits of property are involved, 
but wholly ignore it when the fulfilment of a con- 
tract is at issue, however unjust or oppressive it may 
have become in operation. 

If a man is bound, as the judge charges in a case 
where another allows my property to be injured, 
through carelessness or negligence, by the rule that 
he should do by me as he would have me do by him, 
why is he not bound by the same law when a con- 
tract works to my injury and loss, and which was 
obtained by him for the purpose not to do right by 
me, but to do me wrong, such as he would not will- 
ingly have me do to him ? Or when the property of 
the people is in the hands of the merchant, and in a 
degree he has the power to fix the price, not only of 
his own services, but of those of his customers, why 
is he not bound to do to others as he does by him- 
self ? I may as well follow here these sophistries to 
their just conclusion. It will be urged that advan- 
tage-taking should be justified in order that people 
may learn to beware of making unequal or one-sided 
contracts ; but this reason is also unilateral, so to 
speak, since it is not applied to the other side, where 
a question of property is concerned, and where the 
example would have been equally salutary to the 
property holder, by teaching him to beware of trust- 
ing his property in careless hands. Besides, con- 
tracts of the nature we are treating are made under 
duress and in the interest of capitalism always. 

From what we have seen, profits, distinct and in 
addition to payment of services, can have no honest 
existence where two parties to a transaction are equi- 
tably related to each other and duly informed. No 



54 SOCIAL WEALTH. 

oue wlio knows and can avoid it will pay a profit. 
And no one knowingly will deal at a loss when lie can 
deal Avithout. If both parties can gain in a transac- 
tion, then the benefit is mutual, and there is no profit 
as of one over the other, which is the sole character- 
istic of capitalistic increase. 

Before passing to the consideration of interest as 
a means of increase, we may notice the identity in 
character between the three forms. The definitions 
are interchangeable. For example : 

Interest is the pj^o/if which the money lender or 
capitalist derives from the emploj^ment of his capital. 
Again, 

Pegfit is the interest which the operator or mer- 
chant realizes from his money invested in his busi- 
ness. 

Rent is the interest which the landholder receives 
from the sum of money invested in land, or for that 
sum of money for which said land would sell. Still 
again, 

Profit is the rent of the land which had been sold 
to obtain the capital employed, or for which such 
capital would exchange ; and. 

Interest is the rent of so much land as was sold to 
raise the principal, or for which the principal would 
exchange. 

We can but consider, then, that these three forms 
of increase are essentially one, and rest ultimately 
upon the sole, logical base, the ability of the land to 
produce spontaneously. 

But we have elsewhere fully demonstrated that 
spontaneous productions have no price or exchange- 
able ratio, except in the degree that dominion over the 



UNEARNED INCREASE — INTEREST. 55 

land gives dominion over man; for witliout the tivo 
there is, and can be, no increase of social wealth. 
Not only nothing else produces anywhere any in- 
crease of wealth, but neither man nor the soil sepa- 
rately produces anything. It is only by their union 
that productive phenomena occur. When these two 
factors are united, increase of wealth results legiti- 
mately; but when they are divorced, no increase 
or even production at all is possible. To introduce 
another claimant in the division is fraudulent. Pro- 
duction means more than placing a thing in the 
market. That is but one phase of it, though an im- 
portant one. It begins with the first application of 
the human energy to the raw material, and ends only 
where consumption begins — in the purchase for use. 
The whole process or circle of transportation, storage, 
and exchange is effected through the application of 
labor, and not otherwise. The merchant, by the 
service he renders, becomes a joint owner with the 
others, and is bound to account faithfully to the other 
co-workers. It does not change his social and in- 
dustrial relation, because he has bought out the 
shares of the others ; unless he has dealt equitably with 
them, their interest is not cancelled, and the extra in- 
crease he has gained for himself is the wages of 
deceit and fraud, which are in no way lessened be- 
cause he has conspired with the landlord and usurer 
to share the profit with them. 

INTEKEST. 

If we found no tenable ground for profits, still less 
shall we find any rational justification for interest. 
The man who puts his accumulated earnings into 



56 SOCIAL WEALTH. 

some industrial or commercial enterprise, and accom- 
panies it. with liis personal service in useful over- 
sight, renders service and assumes risks and respon- 
sibilities which justly entitle him to a liberal share 
in the resulting production. If his compensation is 
unusually large in one venture, it begets competition 
and is liable to become unusually small in another ; 
but with the money-lender it is wholly diflerent. 
The secured creditor does nothing of this kind, and 
is no more entitled to a share of the resultant pro- 
duction than if he had placed his gold with a safe- 
deposit company, for which he would have to pay 
storage instead of receiving a premium. In indus- 
trial crises, which follow interest-taking periodically, 
by an inexorable mathematical law, it is the means 
employed in business, or which has been trusted out 
without security, on which the whole burden of bank- 
ruptcies falls. The secured loan does not suffer, but 
is relatively increased in value by the ruin wrought 
to all other interests. Dr. Adam Smith truly de- 
scribes such a capitalist as the ''person ivho has a 
capital from which he wishes to derive a reveyme ivithout 
taking the trouhle to employ it himself.'' In other words, 
one who wishes to obtain the services of others with- 
out rendering himself any service in return, and 
without risk. 

The increased facilities for production afforded by 
loans to labor is regarded by raany as a sufficient 
reason why it should share in division. But to 
arrive at such a conclusion, it is necessary to leave 
out two essential elements of the problem . 

1st. That labor is now unjustly deprived of its 



UNEARNED INCEEASE — INTEREST. 57 

natural right of access to " the raw material of the 
earth," and opportunity to employ itself. And, 

2d. That all forms of accumiilated wealth are sub- 
ject to inevitable decay and decrease of value ; the 
surplus product of agricultural labor, especially ; 
that all this value has constantly to be reproduced 
and kept good by labor, and that the capitalist has 
no other mode possible for the conservation of his 
wealth but to employ it productively. When, there- 
fore, he makes terms with labor, which requires more 
than return of service for service, and of labor for 
labor, he is imposing upon the ignorance or taking 
advantage of the unfortunate condition of the laborer. 
But this, however, he would be unable to do but for 
the enjoyment of monopolies through municipal laws, 
which place the laborer at such disadvantage that 
his necessities compel him to accept terms which the 
capitalist finds no necessity to make equal. 

Under the operation of natural law, the person 
having means to conserve would find a necessity to 
recombine it with labor in order to prolong its ex- 
istence, equally as great as the person who labored 
would find for means to render his labor productive. 
But when society grants privilege to a class to con- 
trol the earth and raw material, it is plain that labor 
must accept the conditions of capital, or starve, and 
that the capital is not only able to throw the entire 
onus upon the laborer of maintaining his decaying 
property intact, but to lay all labor under an addi- 
tional tribute, which shall still farther isolate wealth 
and beget increasing dependence of the industrial 
class upon its accumulations. 

A false element is introduced into the question of 



58 SOCIAL WEALTH. 

awards, wbicli bestows the greater share of labor's 
product upon those who do not Labor. Whoever will 
think can see hov/ impossible it is for such a system 
to operate, without subverting all just principles of 
division, and subjecting labor to the grossest in- 
justice. It will be seen that if one man starts with 
an amount of capital equal to what another can earn 
or produce in a period required to double the capital 
at compound interest, he will have absorbed just as 
much as the labor of one man has produced. At the 
end of the second period he will have quadrupled his 
investment, and at the end of the twelfth period he 
will have multiplied it 4,096 times, having accumu- 
lated, within the last period alone, 2,048 times the 
original sum invested, or the amount which the 
laborer can have produced in that period. If by 
invention, discoveries, or other favoring circum- 
stances, production has increased, it has at most 
been able only to change the difference. If in a gen- 
eration it should add one to what it had previously 
been, it would only give production two in the twelfth 
period to balance the 2,048 of the capitalist. Neces- 
sarily, by the operation of the absorptive series, labor 
never gets more than a moiety of what it produces. 
The operation cannot absorb more than labor pro- 
duces. But this does not prove that the accumula- 
tions do not proceed as the illustration shows, or are 
any the less oppressive to labor. 

The least per centage to the capitalist, not the pay 
for service rendered, involves accumulation by equal 
ratios, in periods of greater or lesser length. To this 
no production of industry is equal which the world 
ever has or can know. Such exaction is therefore 



UNEARNED INCEEASE — INTEREST. 59 

wholly without any logic'al foundation, and is as un- 
scientilic as it is oppressive and unjust. Its presence 
in our industrial system must therefore be referred 
to causes flowing from unequal conditions, usurpation 
and misapprehension of economic law, and not from 
any necessity in the development of the laws of in- 
dustry and reciprocal exchange. 

Taken in connection with our system of land tenure 
— without which its existence would hardly be pos- 
sible — this system acquires a power so fearful that 
no friend of his race can contemplate it without de- 
testation and horror. The accelerated velocity with 
which it enables the avaricious and unprincipled to 
achieve the complete monopoly of the earth, is far 
more dangerous and destructive of human rights than 
any " divine right " of kings, or any mere law of 
entail or right of primogeniture can possibly be. 

It is to be understood that when I speak of the 
operation of this method of accumulation, I suppose 
the capitalist to have the ability to supply his own 
wants by his own efforts. If his income from usance 
merely supplies what he consumes, extravagantly or 
otherwise, then he is a sinecurist, quartered by this 
system upon society, whose industry is rendered 
tributary to the support of a person wholly useless 
to it. 

To show with greater distinctness the operation of 
the principle on which interest operates, le^ us sup- 
pose that the land should be loaned ; and that, in- 
stead of the annual percentage being paid in money, 
it was stipulated to be paid in kind ; that, as interest 
on money is paid in money, so the rent or interest on 
land should be paid in land. Now, a man borrowing 



60 SOCIAL WEALTH. 

land on snch conditions would, in a dozen years or 
so, pay back as interest all he had borrowed, and 
must of necessity repudiate the princijDal — become 
bankrupt in land. For it is evident that in the 
period in which the pa^'ments of interest would 
amount to a sum equal to the principal, an amount 
of land equal to itself, would be required to be re- 
turned to the owner for its own use ; and, as the 
amount of land in any town, state, nation, or the 
world, is a fixed and definite one, the operation of 
any such stipulation would be impossible, and be- 
sides producing untold embarrassment and suffering, 
must end at last in repudiation. A system of con- 
tracts like the above would be held in all courts as 
invalid, because they involved conditions well known 
to be impossible. 

But the operation of our credit system, and pay- 
ment of interest on capital to those who take no care 
in its employment, virtually involves the same con- 
sequences. By the accumulations of interest upon a 
given sum, the possessor can purchase a given amount 
of land in every period, corresponding to the amount 
of the principal invested. This enables the capital- 
istic class, as distinguished from the industrial or 
commercial class, to control the ownership of the 
land just as effectually as the titled nobility of any 
country ever did. 

Havin*5 discussed the general question of increase, 
the principal purpose here has been to show how in- 
timately the interest question is involved with the 
monopoly of land. It is plain, moreover, from this 
showing, that there is no such difference in the rate 
of rent and of interest as has been contended by Mr. 



UNEARNED INCREASE — INTEREST. 61 

George and others. As the capitalized wealth of any 
community or nation increases, the nominal rate of 
interest goes down with wages, but its share in the 
annual production remains the same if it does not 
increase. Let the rent of land be paid in land as 
rent of money is paid in money, and the rent rate will 
be seen to decrease in the same ratio as interest or 
wages. It could not possibly be otherwise. In a 
new country where land is plenty, money and labor 
scarce, wages will be high, interest will be high, and 
rent low. The farm renting for two hundred dollars 
will at most onlybe worth two thousand, and the rent 
will buy the owner another farm in ten years. But as 
the population increases, and the wages and interest 
decrease, it will be possible to increase the amount 
of rent, but the price of land will also have risen and 
in a still more rapid manner, so that, although the 
rate of rent per acre may have increased, the rate 
per cent, will have decreased the same as the rate 
per cent, of money. And it will take twelve, fifteen, 
twenty, or thirty years for the rent of one farm to 
enable the owner to purchase another, the same as 
it will take one capital to beget another. So that 
while the wages of labor are constantly decreasing 
with the growth of capitalism, both the landlord and 
the money lord are enabled to double their capital 
of money or of land in equal periods corresponding to 
each other in every essential feature. 

When interest rules at 7 per cent, it is possible to 
double the capital in about ten years. When 6 per 
cent., in twelve years ; 5 per cent., in fourteen years; 
4 per cent., in seventeen years, and at 3 per cent, in 
less than twenty-one years. At 7 per cent, rent, the 



62 SOCIAL WEALTH. 

farm, witliout any labor or contribution of his own, 
will have "earned" the owner in forty years four- 
teen other farms of equal value. At 6 per cent., nine 
farms ; at 5 per cent., six farms ; at 4 per cent., five 
other farms, and at 3 per cent, nearly four other 
farms. A money-lender will have increased his 
capital in the same or even more rapid ratio, the 
rate being usually a little higher for money than for 
land, as the latter is considered safer as an invest- 
ment or for security, and cautious holders are willing 
to sacrifice the higher rate to the greater security 
against loss of principal. 

It is worthy of remark, how much has been made 
of the " progression of numbers " by Malthus and 
those economists who have availed themselves of his 
subtleties to show that destitution is referable to the 
laws of nature and the arithmetic of the case, and not 
to unequal laws. It is shown that population in- 
creases by " equal ratio," while the production of 
food, at most, can only be increased by " equal 
differences." Thus, it is said, while production of 
food in several periods may proceed with a differ- 
ence of IwQ, it cannot possibly be more than 2, 4, 6, 
8, 10, ]2, 14, 16; while in the same periods the in- 
crease in population will be 2, 4, 8, 16, 3:2, 64, 128, 
256. It is a little strange that Malthus, nor the 
economists who follow him, take any notice of the 
same law as applied to production and taking of 
interest. 

Production by labor proceeds by equal differences, 
interest and rent by equal ratios, and at higher ratios 
than the difference in production ever obtains. Yet 
this power of increase, which takes from the pro- 



UNEARNED INCREASE — INTEREST. 63 

ducer and gives to tlie idler, is not a law of nature 
but a law of the state or municipality. Probably 
for this reason its application here has not been 
alluded to, although to it can be referred mainly 
all the famines and pauperisms which have been as- 
cribed to over-population. Usury and rent have 
been the great levers by which the homes of millions 
of millions have been alienated and gone to widen 
the domain to the sway of avarice and to the love of 
lordly domination. 

The insanity of interest is shown by considering 
the sources from which it is derived : 

(1) From the principal loaned, resulting in bank- 
ruptcy to the borrower, and perhaps loss to the 
lender. 

(2) From the stock of the borrower, resulting in 
his complete impoverishment, if continued, since the 
principal borrowed must be returned intact. 

(3) From the wages, or equitable compensation 
of the borrower, or from the natural wages of his 
employees, or from the profits he has been able to 
realize through unjust and irrational trade from the 
public with whom he has dealt. 

There is no other source from which he could have 
derived the interest paid, unless the exploded notion 
be accepted that the land can produce wealth with- 
out labor, or that goods in process of exchange, 
without labor, increase in quantity or value. 

To attach increased value to things which are 
being operated upon by the reproductive forces of 
nature, aside from the obvious injustice of exacting 
the labor product of another for their operation, and 
of attempting to exchange the work of nature for the 



64 SOCIAL WEALTH. 

work of a fellow-being, is conspicuous when we con- 
sider that the conservation of our perishable pro- 
duct into a durable one, is a quite sufficient induce- 
ment to all salutary work. Ditching for irrigation, 
planting trees, indeed all the things cited as proving 
the right of taking increase, would be done, is done, 
without any such motive on the part of those who 
do the work. The men who have built our canals, 
our railroads, our aqueducts, and made our numerous 
public improvements have not been paid, besides the 
wages for their labor, an annuity from the use of these 
ivorks, for all time to come. The capitalist alone 
receives such tribute, and this, not because he would 
not otherwise have lent his money to promote the 
work, for it is proverbial that he is more ready to 
let money when the rate is low than when it is high. 
Indeed, with good security, he would always prefer 
to have it stored for him than to take the risk of 
keeping it by him, were it not that through the assist- 
ance of our laws, he is enabled to exact tribute in 
this form from the labor of the people, by charging 
for the " flight of time," and the action of " natural 
forces." It is also evident that the "reproductive 
forces of nature," and "the utilization of the varia- 
tions in the powers of nature and of man, which is 
effected by exchange," are present in every form of 
production and exchange whatever, as well as in 
those instanced by Mr. George ; for unless these 
forces work with the labor of man, he produces 
nothing and exchanges nothing. The advantage of 
exchange, whatever it may be, is mutual, or no 
equitable exchange is made. 

Mr. George, when he pays his washerwoman, pays 



UNEAENED INCREASE — INTEREST. 65 

her for lier muscular exertion, and the exercise of 
skill in her profession. If she were, in addition to 
that, to charge him for the use of the sun and air 
which dry them, and without whose aid her labor 
would be of no service to him, he would justly com- 
plain. The boatman who sets him across a stream 
does not charge him for the buoyancy which floats 
his boat or the wind which wafts the sail. It was 
left to capitalism to devise the magic wand which 
turns everything it touches into gold, and thereby 
tax labor for every foot of land it occupies, and every 
field it seeks to cultivate, with every force of nature 
it attempts to utilize, because the grasp it has se- 
cured upon the land gives it control over all natural, 
including the human forces. This author makes a 
special plea for interest or increase, which I will let 
him state in his own words. He supposes an in- 
stance where " in one place a given amount of labor 
will secure 200 in vegetable or 100 in animal food. 
In another place these conditions are reversed, and 
the same amount of labor will produce 100 in vege- 
table food or 200 in animal." But by devoting labor 
in one place to the procurement of vegetable food, 
and in the other to the procurement of animal food, 
and exchanging the quantity required, the people of 
each place will be able, by the given amount of la- 
bor, to procure 200 of both, less the expenses of ex- 
change ; so that in each place the produce which is 
taken from use and devoted to exchange, brings back 
an increase " (Progress and Poverty, 163). 

And yet he admits that labor is required to effect 
exchange ; but thinks " there is a distinguishable 
force co-operating with that of labor which makes it 



66 SOCIAL WEALTH. 

impossible to measure the result solely by the labor 
expended ; but renders the amount of capital, and 
the time it is in use, integral parts in the sum of 
forces." Now, since the capital of trade is only that 
part of the product of labor seeking to be conserved, 
the time it is employed is chargeable, if at all, to 
the other side of the equation, since its owner, in 
permitting its incorj)oration with another enterprise, 
or productive circle, elects to treat it as present labor. 
Besides, what other capital is there in the transac- 
tion he has instanced ? Only " the given amount of 
labor," in the procurement of the 200 of animal and 
the 200 of vegetable food, and the service of trans- 
portation and exchange. There is a surplus of 50 
of vegetable and 50 of animal food which has to be 
awarded somewhere. It is possible that the ex- 
change and transportation may not absorb all this ; 
but there must be no protective tariff or monopolized 
line of transportation, which takes " all the trafl&c 
will bear " between the two places. I am unable to 
see any increase which goes not to the labor as natural 
wages for the procurement, transportation, and ex- 
change of these two kinds of food. It is difficult to 
understand how more capital is required to produce 
the single line of food than for each to produce both 
kinds. Under freedom, neither of the producers 
would change his habit of producing both kinds till 
satisfied that the advantage of change was a mutual 
one, and not an advantage to one side alone, or to 
neither, but to be reaped by an intermediate or 
parasite. 

It is thought that as "the seed in the ground 
germinates and grows, while the farmer sleeps or 



UNEAENED INCEEASE — EENT. 67 

ploughs new fields," there is a good reason why a 
tax should be put upon the growth of food by the 
landlord or usurer. But if nature works thus with 
man, she nevertheless awards him compensation 
according to what he does. When the season's yield 
is large, in proportion to labor bestowed, the farmer 
may get no more, except in kind, as a reduction in 
exchangeable value will bring it to an average with 
shorter crops. Nature, everywhere, repudiates the 
crudity, born of capitalistic assumption, that any- 
thing can be obtained for nothing. Only at the ex- 
pense of labor can this be realized. None knows 
better than the fruit grower and cattle raiser that 
constant attention and careful labor are requisite to 
success. Nature rewards no idler. If Shylock 
makes his " ducats breed as well as ewes and rams," 
it is not because either multiplies without human toil, 
but for reasons wholly outside of the laws of indus- 
trial production or of equitable exchange. 

EENT. 

The nature of rent we have already referred to as 
one with profits and interest, indeed, as the founda- 
tion of both. Its incompatibility with the principles 
of equity and economy are most apparent. But for 
what is called the "rent theory," it would claim but 
a passing attention. To me it is quite evident that 
Ricardo, who first propounded this theory, became 
aware of the impossibility of reconciliug rent with 
any rational theory of the production and distribu- 
tion of wealth, yet felt the necessity of accounting 
for the phenomena in a manner which would divert 



68 SOCIAL WEALTH. 

attention from its wholly unjustifiable nature. The 
" pure economists," since they have dispensed with 
all questions but the one of trade, find themselves 
under no obligation to champion the theory, and 
virtually ignore it, placing land in the category of 
things " which can be exchanged for money," and 
so, consistently, make no distinction between rent 
and other forms of increase. Macleod defines rent 
to be " the mere right to demand compensation for 
use," and the " purchase of a use for a limited period." 
It could, therefore, be summarily dismissed, but that 
Mr. George, after designating it as the main " but- 
tress of the Malthusian theory," and after demolish- 
ing that theory, has seen fit to build up a system 
upon the dismantled buttress, which he thinks still 
remaining. Instead of analyzing rent, he seems to 
regard it as a mysterious power which creates value 
independent of labor, and as something which he can 
tax to any degree without taking from the natural 
wages of labor ; whereas, it is wholly due to exclu- 
sive land ownership, as he himself frequently asserts. 
According to Ricardo, rent is not an arbitrary 
tribute levied upon industry by usurped rights, but 
merely the excess of product, of the best land over 
the poorest, as the latter shall come into cultivation 
or other use under the exigencies of increasing popu- 
lation. As two prices cannot prevail in the same 
market at the same time, so he thinks the cost of 
producing grain on the poorest land will determine 
the price of grain raised upon the best land, and thus 
the excess will determine the rent which will be paid 
for its use. There seems to me little necessity for 
misapprehension in regard to this theory. While 



UKEAENED INCEEASE — RENT. 69 

land is under exclusive dominion it may serve in a 
certain way to explain how the rent rate is determined 
as between particular lands. But this is by no means 
the limit of its use by the followers of Ricardo, 
among whom Mr. George must be included. The 
inference is always sought to be carried that it also 
reveals an economic law under which only rent is 
developed. It assumes that rent does not arise until 
increase of population forces the use of less pro- 
ductive soils. In fact, the operation is directly the 
reverse of this. It is rent which forces the use of 
less productive soils, and thus creates the necessity, 
the previous existence of which is represented to be the 
cause and justification. If the land I till will yield 
40, and I have to pay 10 rent, it is evident that this 
will force the use of a quality which will yield onl}^ 30. 
But let us test this assumed cause, and see if in 
the absence of it altogether the same phenomena will 
not occur. An island of uniform surface and fertility 
is divided equally among a certain number of people. 
And to make the illustration plain, let us suppose 
that all support themselves mainly by raising grain. 
It seems quite certain no rent would be paid, though 
a number of incidents might be conceived under 
which it were possible, even while the soil in every 
portion remained of the same fertility. One circum- 
stance, however, would certainly and permanently 
establish rent, and that not a varying productiveness 
of the land, but the presence of laborers who were 
debarred access to the soil. As soon as there arose 
an increase in the populatio7i reqin7'ing land, ivMch it tvas 
in the poiver of holders to deny, land would have a price, 
rent would be offered and taken, or the laborers would 



70 SOCIAL WEALTH. 

offer their services at a price below " the whole pro- 
duct of their labor ;" and the rise of rents and decrease 
of wages would inevitably follow every increase of 
such laborers, just the same as if extremes existed in 
the productive capability of the land. As population 
increased, land-holders would decrease, under a sys- 
tem of land-holding like ours, and a divergency of 
conditions would jDroceed till a landed aristocracy 
arose at one extreme, and a dependent, wretched 
proletariat at the other. And this would result, not 
at all on account of the unequal fertility of different 
soils, but wholly because " the increase of ownerslups 
had not kept pace luith the increase of jwpulation." 

The theory also assumes that poor land below the 
margin of cultivation can be had without rent. I am 
certain only exceptional cases can be found where 
land can be had at all without rent, and these will 
occur as often on the best as on the poorest lands. 
Often within the limits of our cities fertile patches 
are occupied without rent, while the settler taking up 
free land on the prairie often pays rent to his earlier 
neighbor for a corn or garden patch. 

Under monopoly, often as now in Ireland, the 
poorest is rented, while the best lies idle, in deer- 
parks or sheep-farms, the tiller accepting that which 
he is compelled to. Labor here has to deal with 
privilege to which no economic principle applies, and 
where demand and supply have no operation, and in 
which one party to any transaction has the power to 
determine the compensation of both, and if any, a 
forced exchange takes place. Between " the whole 
product of labor " and the " wages bordering on 
starvation," there is a wide margin from which the 



tJNEAENED INCREASE — RENT. 71 

landlord can draw fabulous wages without regard to 
any etliical or economic law. To attempt to reduce 
such stupendous larcenies to a system compatible 
with the crudest form of equity, will forever, as it 
has heretofore, prove the despair of science. 

In connection with this theory, it must be remem-^ 
bered that land is required for other purposes than 
raising wheat. Indeed, the best wheat land may 
prove the poorest for pulse, garden truck, or small 
fruits, and land which will not answer for either may 
be all the better for storehouses, factories, and dwell- 
ings. The requirement for land is as various as 
human industry. Mr. George himself (Progress and 
Poverty, p. 149) recognizes that " rent, in short, is 
the price of monopoly, arising from the reduction to 
individual ownership of natural elements, which 
human esertion can neither produce nor increase." 
How he can abolish the monopoly and have the 
price remain is a dilemma from which I do not feel 
bound to extricate him. On page 219 we find this 
passage : " The effect of increasing population upon 
the distribution of wealth is to increase rent ... in 
two ways — 1st. By lowering the margin of cultiva- 
tion (Kicardo's theory) ; and, 2d, by bringing out in 
land special capabilities, otherwise latent, and by 
attaching special capabilities to particular lands. I 
am disposed to think that the latter mode, to which 
little attention has been called by political econo- 
mists, is really the more important." 

Now, since this latter mode not only differs from 
the former, but is the opposite of it, and equivalent 
to a raising of the margin of cultivation, they cannot 
both support the same theory. But the above is by 



72 SOCIAL WEALTH. 

no means the only subject connected with this ques- 
tion to which the economists have called little atten- 
tion. No account is made of the fact that the natural 
capacity of land has very little to do with its actual 
productiveness, which depends mainly on the supply 
of manures and fertilizers, rotation of crops, and 
skilful dressing and keeping. Little attention has 
been given to the great drain that has been made 
upon our most fertile lands by the cousumjjtion of 
our large cities, whose sewers are choked with the 
principles of fertility taken from the soil, the rent of 
which still rises. 

But the only practical test to which the theory of 
Ricardo was ever subjected proved it wholly value- 
less. On the agitation for the repeal of the British 
corn laws, it was urged that repeal would destroy the 
landed interest by greatly reducing rents. But on 
their repeal in 1846, opening the markets of England 
to the products of all the cultivable land upon the 
globe accessible to British commerce, rents not did 
decline, but rapidly advanced ; and for more than a 
generation no perceptible effect has been discovered 
attributable to the change.* 

The point of greatest imjDortance, as viewed by the 
Ricardo school, is that " rent must exist, and cannot 



*I quote from Chambers's Encyclopedia, Art. "Corn Laws," pub- 
lished fifteen years after their repeal. Tlie italics are mine: "Tlie 
results of the rapeal are well known. Every evil prognostication has 
been falsified. Poor lands are as much cultivated as ever, and even 
more so. There has been no stoppage of unports by war nor otherwise, 
nor are there likely to be. . . . Instead of falling, the rent of land of all 
kinds has risen, and tenants and proprietors are alike satisfied. The 
working classes are better, instead of being worse employed." 



UNEARNED INCREASE — RENT. 73 

be got rid of. Whoever has land at his command 
better than the worst that is cultivated, holds rent. 
It is in vain, therefore, to think of destroying the 
monopoly of land owners. It revives as naturally by 
an economic, as water finds its level by a physical 
law." It is for this reason that Mr. George concludes 
that the only way to establish equity is to confiscate 
or tax away the rent, and thus secure to each member 
of a state his just share of the unearned increase. It 
is urged that if the land were to be divided equally 
to-day, it would immediately begin to accumulate 
again in the hands of the industrious and frugal, and 
so become at length absorbed in a few hands, as now, 
and of course yield again the same rent. 

But such result could not be effected if land were 
treated, not as exchangeable goods, but as a comple- 
ment to labor, as it is in nature. The distinction 
between it and the increase of goods, relied on to 
establish this theory, viz.. That while the increase 
from them " arises out of the acts of the holders, the 
rent of land is a fund that exists through external 
causes, over which the holder exercises no control," 
proves that it cannot be equitably exchangeable with 
that which requires activity in its production, since 
there can be no equation between two things, one of 
which costs labor and the other does not. One 
might as well pay for any service by giving the priv- 
, ilege of breathing the air as of using the land. The 
theory itself is therefore incapable of statement, ex- 
cept in terms which preclude it from exchange, and 
hence from the realm of economics. 

The inequality which Mr. George thinks he sees in 
any attempt to abolish landlordism, which does not 



74 SOCIAL WEALTH. 

confiscate " economic rent," is mainly chimerical, and 
could hardly form a serious difficidty were occupancy 
made the sole title to land. With wider acreage of 
an inferior quality, with more varied crops, and per- 
chance more careful tillage, these inequalities would 
be greatly reduced, if they did not wholly disappear. 
There are many compensations not apparent at first 
glance. The man with land of easier tillage, or more 
productive soil, will be able, doubtless, to obtain the 
same price for his grain or fruits as the man with 
poorer soil and shorter crops. Having more to ex- 
change, he will purchase more luxuries. This will 
stimulate other industries, but will not increase the, 
cost of actual necessaries to his poorer neighbor. 
Under " occupying ownership," moreover, the prin- 
ciple of first serving the first comer must obtain. 
Only as population increased, and progress in pro- 
duction advanced, would the less desirable places 
come into request. The older and feebler would 
thus be usually in possession of the more produc- 
tive, and the younger and stronger be left to attack 
the less favored situation. 

The theory absurdly proceeds, moreover, upon the 
hypothesis that the best land will continue to pro- 
duce bountifully from generation to generation. 
Land, however fertile, when first taken up, will, 
unless continually manured, soon work down to a 
point where it will yield no more than the same 
quantity of manure will produce upon land of ordi- 
nary quality. It is the opinion of the best writers 
upon the subject of agriculture that it is the culture, 
not the soil, which determines the great disparities 
in agricultural production. Generally, then, produc- 



UNEARNED INCREASE — RENT. 75 

tiveness of the land depends upon the labor applied, and 
upon the return to it of the elements of fertility. The 
original disparity iu regard to soils would soon 
disappear under natural apportionment and intelli- 
gent use. 

In dealing with .the subject of rent, as with interest 
and profits, it is important to distinguish between 
that which is actual rent and that which goes under 
the name, but is not rent j^roper. As to profits are 
usually added services in exchange, and to interest 
the assurance against risk, etc., so to rent there is 
usually added insurance, taxation, repairs, and the 
general expense of keeping up the property ; actual 
rent, as actual interest and actual profits, are pay- 
ments for that which represents no service or com- 
modity parted with by the claimant, and hence is not 
an exchange but a tribute. This distinction is so 
readily drawn that it only requires to be referred 
to here. 



CHAPTER V. 

CONSERVATION OF WEALTH. 

Every person wlio completes a truly rounded life 
passes through two stages where his powers of pro- 
duction do not equal his necessary consumption, and 
a single, but usually longer period, where they con- 
siderably exceed it. Infancy and childhood have to 
be sustained by the product of the labor of others. 
And the early education is generally a gratuity to 
the youth. Again, in old age, and in the decay of 
the physical and mental energies, support must come 
from other than one's own exertions at that period. 
The period embracing early and mature manhood, 
on the other hand, is usually accompanied by strength 
of brain and brawn, to enable the man to produce 
more than he is under any necessity of steadily con- 
suming. Taken in connection with the fact that all 
forms of wealth constantly decay, though some with 
much greater rapidity than others, there arises an 
inflexible necessity that some method of conserva- 
tion should be found which would enable the pro- 
ducer to store up in a durable form the values which 
he has created, but which will soon disappear, un- 
less so conserved. In consequence of the nearly in- 
destructible nature of gems and the precious metals, 
and because they possess attractions for the barbaric 
mind as ornaments and charms, these, at an early 



CONSERVATION OF WEALTH. 77 

period, became the great agents of conservation. 
Flocks and herds, from their power to grow and mul- 
tiply, also became sought for to this end, as well as 
for their power, in connection with dominion of the 
land, to yield a ready increase. 

The only way in which the man usually can repay 
the cost of his early support and education is by 
providing for the support and education of his own 
offspring, though often he makes direct return in the 
care and support of parents. But this requires ac- 
cumulation and conservation, which means accumu- 
lation in a form to retain its value undiminished as 
nearly as may be. There is, therefore, abundant 
motive to accumulation in active life, if all thoughts 
of increase without labor were eliminated. And when 
is added the desire to provide our old age with comfort 
and ample support, there arises a demand for such 
forms of value as will give guaranties of unvarying 
stability. The agriculturist will find, in the planting 
of fruit-trees, a sure means of storing and conserving 
the products of his manhood's labors ; in such form, 
too, as can be readily combined with the lighter 
subsequent labor required to care for them and 
gather the fruit. A great variety of forms might be 
given in illustration, but this must suffice. The laws 
of equitable division or exchange will thus repay the 
abstinence of the frugal, not with increase, but with 
compensation for the labors performed, but not before 
completely satisfied. 

Of all pretexts for the justification of increase 
without labor, that of time is the most flimsy and 
groundless, and if it were not associated with the 
idea that capital is, in some sense, labor or the pro- 



78 SOCIAL WEALTH. 

duct of labor, it could not be made to assume the 
least plausibility. But we shall see how little inves- 
tigation it will bear. The man who has labored and 
received the natural wages of his toil, finding them 
subject to perish more or less rapidly, turns them 
into some form less perishable ; the main and nor- 
mal motive being to save their value from its ordi- 
nary tendency to decrease. That they are converted 
to this use, and so conserved, instead of being con- 
sumed productively, is proof that the holder is, unable 
or unwilling thus to consume them, and prefers a 
stable value to a changing one. Without intending 
to introduce any discussion here as to the nature 
and functions of money, I may say that it is a me- 
dium provided by society, one of the uses, if not 
purposes, of which is the conservation of wealth to 
the producer. And this it effects well or ill, accord- 
ing to the wisdom displayed in its creation and the 
regulations which determine its character. But 
whatever else may be claimed as the powers of 
money, it will not be pretended that it has any power 
of increase. In placing his wealth in this form 
(when done for conservation, and not for convenience 
of exchange), the owner indubitably elects to put 
his property into to that from which no increase to 
it can be added but by joining it to other labor. 
He elects to treat his property, loMle in this form, as 
though it were the loages of labor just completed. It will 
make little difference, indeed, what the particular 
form of wealth in which the value of his labor is 
stored. The utmost that the social comity can secure 
to him is the undiminished value of production. 
Unless most wisely converted by him, and most in- 



CONSEEVATION OF WEALTH. 79 

telligently as well as equitably guarded by society, 
it cannot keep whole the value of the labor he be- 
stowed. Only when the production be converted 
into cash, or some more durable form, or has been 
consumed productively, can society return to him 
" measure for measure," without suffering loss. His 
labor, then wrapped up in the new production, must 
have been but a trifle in time antecedent with the 
later labor, which rehabilitated it in a new commod- 
ity. But the labor doing this should share the 
entire result minus the amount of labor concreted in 
the things consumed, and no more could be returned 
than had been received, without robbing the later 
worker of a part of his natural wages. 

If it be asked whether accepting the contribution 
of the holder of past labor-pledges or tokens, and 
performing a certain number of days' work, the out- 
come of this work may not yield an increase over the 
values of the labor taken as a whole, the reply is, 
that under a system of monopoly and tax to capital 
such a thing might well happen, but even then the 
increase awarded to the employed capital is usually 
taken from the wages of the employed labor, and not 
because the union of the past with present labor has 
made the present labor more productive. That union 
of labor, as well as division of labor (which, in the 
sphere of a healthy exchange, are branches of the 
same thing — co-operation), aids production, is not 
denied. That by the use of conserved wealth we can 
co-operate with past labor, may be admitted, but to 
return to that past labor more than value for value 
involves the self-contradictory assumption that 
the past labor is more valuable than present labor, 



80 SOCIAL WEALTH. 

although at the same time admitting that we use it 
only as present labor when we join it to present 
labor. But to make the thing more plain, let us 
suppose our unit of value to be a day's work. It 
will be asked, if two parties contribute the same 
number of days' work of the same degree of effi- 
ciency, why should they not receive the same com- 
pensation? Undoubtedly they should. Then it 
would seem to follow that the owner of the hundred 
days' labor, contributed by the holder or conservator 
of labor, should share equally with the present 
worker, who immediately contributed his hundred 
days' labor in producing the new materiah The 
total production is now the wages of the two hun- 
dred days' labor, of which each will be entitled to 
an equal share. Before any deduction can be drawn 
from this to favor the claim of increase, however, it 
must be shown that the result is more than the wages 
of two hundred days' labor, which is an absurdity. 
It is vastly easy to conceive of circumstances which 
would make the joint product considerably more or 
considerably less than the usual product, or the pro- 
duct which the present worker would be able to 
produce by his individual labor continued for two 
hundred days; but to admit the principle of increase 
anywhere is to abandon the fundamental proposition 
that the whole product cf labor is the natural wages 
of labor, and admit that society may not only guar- 
antee the conserved values of wealth, but an increase 
upon them, although all forms of wealth constantly 
decrease, and require constant care and risk in their 
conservation. The only question which can arise in 
equit}^ it seems to me, would be whether the past or 



CONSEEVATION OF WEALTH. 81 

tlie present labor should pay the cost of the guaranty, 
or whether it should be borne between them ; and if 
so, in what proportion. If any question of risk or 
hazard arises, it is doubtless right that the one taking 
the risk of loss should take the surplus product, if 
there should prove to be one ; and if both shared the 
risk, both should share the advantage. The whole 
question of increase is narrowed down, then, to these 
dimensions, but really it originates in a wholly dif- 
ferent way, and rests upon a wholly different basis. 
The natural issue between the demand for conserved 
labor to combine with and aid present labor in pro- 
duction, and the demand for present labor to con- 
serve and transmit to the future the present values 
of j)ast labor products, has never been allowed any 
fair play by the laws and customs engendered in 
ignorance and greed, and never can be while fraud- 
ulent titles are sustained by public law, or while the 
land and all means and opportunities of production 
remain under the dominion of monopoly. In the 
absence of usurped rights, which are exercised under 
the laws and customs upholding capitalism, it can 
hardly be doubted that these mutual demands would 
tend to equilibrium, or complete reciprocation. 

If rent, interest, or profit has any rational or eco- 
nomic excuse for being, it must rest on a ground 
wholly different from that assigned by any writer on 
economics, viz., upon the necessity, real or imagi- 
nary, of some to borrow of others — lands or products. 
But the necessity to borrow land is wholly due to 
the unequal and exclusive ownership of the land, and 
any rent, interest, or profits (different names merely 
for increase) is clearly the fruit of usurpation, and 



82 SOCIAL WEALTH. 

not of any economic law. That sucli exclusive owner- 
ship also creates the only real necessity for borrow- 
ing goods, seems too plain to require argument. But 
that question may safely be deferred to the time 
when commercial monopoly of land shall be abol- 
ished, and the normal economics and industrial laws 
be allowed to assert themselves, uninterfered with 
by municipal enactments. If the right of unearned 
increase is truly an economic principle, and it is 
made the sole one by the later economists, then in 
the absence of fostering legislation it will be all the 
more likely to make its claim good, and an oppor- 
tunity will be had to obtain exact data as to its 
operation. What is so manifestly unscientific, as 
well as unfair, is to treat that as a normal result of 
economic law which is due mainly to the direct in- 
terference of the civil law, and could not exist with- 
out it. 



CHAPTER YI. 

TOOLS AND IMPROVED MACHINEEY. 

Notwithstanding the. general admission that labor 
alone creates wealth, it is thought that it may be 
greatly assisted by the use of new and improved im- 
plements and methods. It is quite evident that the 
savage could do little in felling trees and working 
them into forms of use, with the stone ax, once used. 
A man with a fine steel ax could, doubtless, do more 
in one day well than the savage could do in a hun- 
dred days very imperfectly. Is not the ax, there- 
fore, productive, and as such become a factor ? and 
should not the owner of the ax, if he permit his less 
fortunate neighbor to use it, be entitled to a share of 
the increased production? It is best to consider 
what does result, and the cause of it, rather than 
what ought to be. 

Now, in the case supposed, if the man who pos- 
sessed the new ax had a patent right on it by which 
the use of any but stone axes was prohibited to all 
others, he would, doubtless, be able to derive an 
income from selling the use of his ax, and others like 
it he might get manufactured. But a patent to the 
land on which the trees grew that were to be cut 
with tlje ax, would be just as effectual. To arrive at 
any exact conception, however, of the nature of im- 
provements as entering into industrial production. 

fcS 



84 SOCIAL WEALTH. 

both of tliese patent rights, having no foundation in 
nature, but only the sanction of class legislation and 
the crude and outgrown customs of unscientific j)e- 
riods, must be eliminated. Under equal opportu- 
nity and reciprocal interchange of service, the benefit 
of improvements could not fail of being generally 
enjoyed. Inventions do not spring up without cause 
and impose themselves upon mankind. The whole 
procession of improvements is a growth, called forth 
by the social and industrial life of a people, and not 
by the creative act of a single mind. The ax itself, 
in its present effective form, has grown from the stone 
ax, or something still more rude, by minute degrees. 
The inventor of a neiv macliine merely introduces a 
neio manufacture. As soon as its utility is discovered, 
a separate industry will grow np, and their produc- 
tion will be governed by supply and demand, the 
same as of all other productions, so that the work- 
man, as now with the ax, will only have to give a 
day's labor for one, and thereafter will be able to 
compete with the best. The owner of the new ax 
does not compete with the owner of the stone ax, 
but with one who has or may have one every way as 
good as his own. It is thus seen that all benefits 
arising from improvements are social benefits even 
as they are the result of the social growth. No 
sooner does a new useful machine appear than 
workers are ready to work at its production at same 
compensation as they obtain in other employments. 
Only the monopoly of conferred privilege, which 
denies the rights of others to do, enables one to 
realize a fortune without labor by a royalty tax on 
the public. 



TOOLS AJSTD IMPKOYED MACHINERY. 85 

I am not now arguing against a method of com- 
pensation for the time and sacrifice employed by an 
inventor ; but only against the unequal method by 
which it is now attempted through patent laws. 
Usually, a party will find sufficient inducement and 
compensation, in introducing a new thing to the 
public, by the start he will have of competitors, and 
by the extended reputation it will give to his busi- 
ness. But it is not my purpose to enter into the dis- 
cussion of the propriety of patent laws, except so far 
as they confer a power to prevent competition and 
interfere with the natural law of supply and demand. 
But for the state of society and of industry, which 
makes his invention available, it would be of no use 
to him, and without the presence of workers, whom 
his monopoly does not remove from the influence of 
competition, he would be unable to supply any con- 
siderable demand for it. Of the millions that are 
paid to patent monopolies by the public the pro- 
ducers of the patented articles get nothing, as it is 
well known that such employers seldom pay higher 
than the market rate of wages. It is this trick of 
capitalism, of subjecting labor to competition, while 
lifted wholly above it by class law itself, that is ob- 
jectionable. That the public are willing to compen- 
sate the inventor is shown by their submission to 
such unequal laws ; but, as a rule, the inventor is 
merely the stool-pigeon of capitalism, who is sacri- 
ficed or apotheosized, accordingly as either can serve 
its purpose of making unearned gains and extending 
the base of its profit-bearing stock. 

The idea of a natural exclusive right in invention 
or in the publishing of books is absurd. If there is 



86 SOCIAL WEALTH. 

one, why our patent and copyright laws ? Why not 
defend the right at common law or by general con- 
sent ? Because a man utters a new word, or coins a 
new phrase, is that his property which no one may 
repeat ? If we may not be prevented from reiter- 
ating it, why from rewriting it or reprinting it ? Be- 
cause a man builds a house to shelter himself and 
family, shall all mankind be compelled to dwell in 
caves to the end of time ? or pay him and his de- 
scendants a royalty or kingly tribute? Doubtless, 
society will feel under obligation to one who has 
invented a useful thing or written an instructive or 
entertaining book. And the man who has conceived 
or perfected either of these has the power of property 
over it, while he keeps it private or secret, and will 
usually find means to secure an advantage from it 
before making it public property, as Daguerre did 
with his beautiful invention. Society, too, may take 
lawful methods of awarding services of that kind ; 
but to create a monopoly is not one of them. For 
books and inventions a premium might be allowed 
for a given time ; but not to interfere with the free- 
dom of manufacture and sale by all who would re- 
spect the right. 

But industry has no patent device for obtaining 
wealth, and the legal privilege bestowed on those who 
usurp dominion of the land or obtain the right to 
prohibit work like that which they have been incited 
to do by the education and means they have derived 
from ages of toil and experience of others, is not in 
the social interest, but opposed to and destructive 
of it. Industry has no secrets which would debar 
the willing toiler from following any method or pro- 



TOOLS AND IMPROVED MACHINERY. 87 

cess found to be advantageous. In agriculture, par- 
ties vie with each other in communicating useful 
knowledge, and form clubs for the purpose of making 
known improved methods. A new comer in any 
section of our country will have abundance of good 
advice tendered him, so that, at times, it may become 
embarrassing. Only when knowledge becomes em- 
bodied in some art or handicraft is it in form to be 
monopolized, and then, even, it often parts "for a 
song " with meritorious discoveries or inventions to 
the "lying-in-wait" capitalism, which captures it, 
and from it, perchance, builds up a fortune. Our 
progress in science and industry is in no way due to 
capitalism or any motive consistent with its sway. 
On the contrary, these have flourished most where 
there was the greatest freedom. Certain features of 
the arts may be affected or promoted by capitalistic 
patronage and favor, but not so with science. Not 
the patent or copyright laws have produced the most 
useful inventions or discoveries. The love of science, 
love of art, love of truth, love of discovering it in 
mechanics and in the physical sciences, have done 
all that is worthy our consideration. Love of gain 
has operated to distract rather than foster useful 
discovery. In those few instances where merit has 
apparently reaped a rich reward under its methods, 
it has operated often to exclude other cognate im- 
provements, which would have been made and put 
to use but for the exclusive right bestowed upon one 
perhaps no more worthy than the others. The most 
useful inventions are those whose real discovers are 
not even known. Indeed they are growths rather 
than inventions. And " learning hath gained m.ost 



88 SOCIAL WEALTH. 

by those books bywliicli the printers have lost," and 
which have yielded no royalty to their authors. 
Patent right, under monopoly, has led to more per- 
nicious than serviceable results, and copyright has 
fostered the growth of ephemeral rather than useful 
literature. An invention which has realized the 
patentee more than lialf a million, to my personal 
knowledge, was never put into a practical shape by 
him, yet he had his monopoly continued for twenty- 
eight years and then repatented it under another 
name. Not until the expiration of his monopoly was 
any marked improvement made in that line, and a 
very inferior product was furnished the public until 
it was improved by parties not working under the 
patent. 

The daguerreotype is another case in point. The 
discoverer was unwilling that his great invention 
should be made a monopoly by a few, and thus shut 
out improvement. He desired that the world should 
have the benefit, though he naturally wished to be 
paid for his services in completing the discovery. 
He found a means to effect both of these desires. 
The French government purchased his secret, and 
shares the glory of having given so important an 
invention to the world. But, notwithstanding this, 
it was patented in England, and the result is what 
might have been expected — English pictures con- 
tinued far below the standard of excellence of those 
taken by the artists of other nations, particularly the 
American. Mr. Snelling (Art of Photography, 1850), 
says : " I have seen some medium portraits for 
which a guinea had been paid, and taken, too, by a 
celebrated artist, that our j^oorest daguerreotyi3ists 



TOOLS AND IMPROVED MAGHINEEY. 89 

would be ashamed to sliow to a second person, much 
less suffer to leave their rooms." He also says : 
" Calotype is precisely in the same predicament both 
in England and the United States," Mr. Talbot hav- 
ing taken out patents in both countries. He de- 
scribes the pictures made under patent as far in- 
ferior to those made at the same time in Germanv 
where no patent existed. 

In the introduction of new varieties of fruits, 
cereals, or vegetables, which may be classed with 
useful inventions, various methods are adopted to 
retain a monopoly ; but without the interference of 
the law, it can have but a short life, and work no 
great injustice like those protected by statute. I 
call to mind, in horticulture, two instances illustra- 
tive of the principle to show that not that service 
which has been best paid has proved most service- 
able to society, but the reverse : Dr. Grant intro- 
duced the lona grape, and made a moderate fortune 
out of it. It proved wholly worthless as an invest- 
ment to the purchasers, though it was a grape of 
fine quality. The thousands he realized from it may 
be said to have been a dead loss to grape growers. 
Horace Greeley, through offering a prize of a thou- 
sand dollars, brought out the Concord grape, and, 
indeed, a number of other varieties, through the 
emulation it stimulated, by which every grape grower 
in the country has been benefited. 

The objection, that without patent or copyright 
laws no one would engage in making inventions or 
publishing books, indicates that as our legislators 
act largely in the interest of capitalism, they have 
little care for the author or inventor, any farther 



90 SOCIAL WEALTH. 

than as tliey can be made subservient to capitalistic 
enterprise and speculation. And this is true ; our 
copyright and patent laws are shaped mainly to 
enable capitalistic control to manage the affairs of 
publishing and of the manufacture and use of pat- 
ented articles or machines. The interest manifested 
in the rights of authorship and of invention is too 
flimsy a pretense to deceive any but those who court 
deception. 

There is, however, at the utmost no power in in- 
vention or authorship, to beget wealth to the indi- 
vidual or to society without the constant co-operation 
of society and of the individual worker. The author 
cannot exchange his literary wares, nor the inventor 
even obtain the manufacture of his machine, much 
less its sale and use, without dealing with or employ- 
ing others who have no exclusive rights, but have to 
compete with the many unprivileged, and whom the 
use of the new machine even, or reading of the new 
books, does not relieve from competition, but tem- 
porarily, if at alL The prejudice of the workers 
against the introduction of machinery deemed so 
obtuse and irrational by writers on political econ- 
omy, is based, doubtless, upon the conviction that 
improved machines, tools, etc., are productive, and 
enable the controllers of wealth to dispense with so 
much labor as its increased productiveness repre- 
sents. It is the stolidity of their own teachings, 
then, which needs to be corrected, not the blind in- 
stinct of the embruted workers, which has taken 
them at their word. Surely the man with the stone 
ax, who by its use barely subsists, is justified in 
attempting to exclude the steel ax from the work, 



TOOLS AND IMPEOVED MACHINEEY. 91 

since it will reduce the necessity for his labor by a 
hundred fold, and therefore means a fiercer competi- 
tion and struggle for existence, even if he is able in 
any way to obtain possession of a steel one. But if 
he is mistaken, as it may be admitted, were oppor- 
tunity not engrossed by monopoly, then is their ^ 
teaching false, and more rapid production does not 
beget disproportioned compensation, because the in- 
creased production in the gross is balanced by the 
reduced ratio in exchange with the products of other 
kinds of labor, the same as where cheapness of food 
is caused by an unusually productive season, and 
which often rewards the producer less than the 
scanty yield of a less productive one. 

If the price of machine-made boots and shoes 
were to remain the same as hand-made, then society 
would have no interest in the question, and certainly 
no justification for granting privilege to the intro- 
duction of the machine-made work. Only the owners 
of the machines would be benefited or interested. 
But it is because the machine furnishes them cheaper 
than they could be made in the old way that the 
many become interested in its success and recon- 
ciled to the crowding of labor out of the old industry, 
to be reabsorbed into the general industries or to 
create new ones. 

To make good the popular fallacy that machinery 
and tools are productive in the sense that labor is 
productive, it would be necessary to find them of 
such material as never wears out, and of a construc- 
tion which would operate without power, involving 
perpetual motion. Even then, since labor could 
construct them, they would be open to its acquisi- 



92 SOCIAL WEALTH. 

tion, because labor, with access to land, can produce 
all things, and thus iu time all men could live with- 
out work, and production would become so universal 
as to be of no value or interest to anyone. Wealth, 
or that which we now call so, would be as the waters 
of the ocean, or the sands of its shores. Farms 
would produce without labor ; factories would run 
without hands, and materials would convey them- 
selves to the factories to be manufactured, with 
motive power of their own. 

To say that a man can do more with suitable tools 
than without, is merely saying that he can do more 
work, or produce more goods in six days than he can 
in five, for if the consumption of his tools rej)resents 
the labor of one day in six, or any definite propor- 
tion, it is evident he must give that proportion of 
labor in every six employed in the procurement of 
goods, to providing himself with tools. That is all. 
It is true that under division of labor the particular 
person may not be able of himself to make the tools 
required by him, but under such division he is able 
to do some other thing with greater facility than the 
man who makes the tools, and consequently, since 
he procures an equivalent for them, he really pro- 
duces them by his labor as much as if he wrought at 
that particular trade. If one day's worth of tools 
are consumed in five days' labor in producing goods, 
then the goods are the product not of five, but of six 
days' labor, and of no tool or machine, in any eco- 
nomic sense. To say that the day's work spent in 
procuring tools is of more value than either of the 
five days' work in procuring goods witli them, is 
nonsense, since the procuring of the goods is the 



TOOLS ANB IMPROVED MACHINERY. 93 

purpose of the one as well as of the other. The 
same is true of all preliminary steps in any produc- 
tion. The tools, the procurement of raw materials, 
the consumption of other goods required, and every 
expense requisite is equally important, and equallj^ 
the product of labor as well as the finally resulting 
product. In tools, machinery, plant, materials, con- 
veniences, and accessories, there is nothing but labor 
or its product. To draw a distinction anywhere, and 
say this is capital, and this is labor, is a " distinction 
without a difference." It is as unscientific as the 
purpose for which it is attempted is iniquitous and 
oppressive. 

A blacksmith, for instance, called upon to do a job 
out of his usual line, and for which he has no appro- 
priate tool, will proceed to make the necessary tool, 
and then perform the work. He will of course 
charge for his labor and material, both of the tool 
and of the thing made. If, howeA^er, the tool be one 
which he may need again, and is likely to prove 
serviceable in his business, he will make little or no 
charge for the use of it more than its proportionate 
consumption. That he would not be able to do it at 
all without the tool is no reason why he should 
charge more than the labor and material employed 
in its construction, or why the hardware merchant, 
if it is a tool he can readily buy, should charge him 
more than he charges others, who are under no im- 
mediate necessity to obtain one. For the price of 
things on sale is governed by the general demand, not by 
the private necessity, and if competition were free the 
smith could not make a profit out of the use of his 
tools any more than the ditcher could make a profit 



94 SOCIAL WEALTH, 

out of the use of his pick and shovel, because he 
could do so much more with them in his calling than 
he could with his naked hands. He has to compete, 
not with men with naked hands, but with men with 
as good tools as he himself has, which they are able 
to furnish themselves with, or have furnished them 
by those who need their services. 

The same principles apply to the use of horses 
and cattle. A man can do vastly more with a horse 
and plow than he can with a hoe in raising a crop 
of vegetables ; but he does not compete with the man 
who has nothing but a hoe to work with, but with 
a man whose horse and plow are as good as his. 
The man with the hoe alone is also needed to com- 
plete what the plow cannot finish, and to work in 
places where the plow or horse cannot be used. 
Otherwise there would be an over-production of 
horses and plows, and their wages would be re- 
duced to a minimum, and of course all profit in their 
use would come to an end, and further investment in 
that line would prove a loss, not a gain. 

Bastiat's instance of the plane of James borrowed 
by William, rendered famous by Ruskin's " position 
of "William," and by George's criticisms, is a very 
subtle attempt to prove that tools are capital. It is 
singular that neither Bastiat nor either of his talented 
critics thought it necessary to inquire whether the 
supposed case had any relation to custom. With 
more than a half century's experience in active life, 
in which I have wrought in a number of productive 
fields, I do not remember of any worker paying for 
the use of a borrowed tool, though nothing is more 
common than such courtesies among laborers, me- 



TOOLS AND IMPEOVED MACHINEEY. 95 

ctanics, artisans, and agriculturists. The rule is the 
reverse of this. Among farmers, tools loaned are not 
only loaned without usury, but without compensa- 
tion for actual wear and tear, and the owners deem 
themselves fortunate to have them promptly re- 
turned, uninjured but by reasonable deterioration. 
So much for the reiterated platitude that " nothing 
will be loaned, and no accommodation will be granted 
without profit " or appeal to a selfish greed, which 
only seeks personal gain, never social good. 

I remember when the first railroad was built in 
this country. A serious apprehension was felt among 
farmers accustomed to raise horses, that the disuse 
of horses in the long lines of stages then required 
for the transportation of passengers and freight, 
would render the horse valueless. As is well known, 
however, the introduction of railroads has increased, 
rather than diminished, the demand for horses. 

At one time it was thought that the sewing ma- 
chine would ruin the business of the seamstress ; but 
I am informed that, on the contrary, it has so increased 
the demand for elaborate work on ladies' dresses that 
more time is required to make the average dress now 
than at any time before the introduction of the 
machine. 



CHAPTEK VII. 

THE NATUEE OF WAGES. 

Wages, and the fund applied to tliat purpose, were 
subjects of much consideration by the earlier school 
of economists. But the later school attach little, 
if any, importance to the question, but look at every 
subject as a matter of exchange merely. Mr. George, 
in attacking the theory of the " wages fund," there- 
fore, revives a discussion which is certainly becoming 
obsolete. There are still those, however, who think 
that the theory gives countenance to the popular 
fallacy that capital employs labor and therefore is 
entitled to a share of its earnings. Mr. W. H. Mal- 
lock has attacked, with a great deal of vigor, Mr. 
George's exposure of the erroneous teachings of the 
elder school of writers. 

It does not seem to me necessary to discuss the 
subject farther than to refer to the controversy be- 
tween these two gentlemen. 

The last named has endeavored to show that wages 
are not paid from any fund whatever, but that their 
amount is usually added to the capital of the em- 
ployer before the wages are paid. This is sub- 
stantially true, and yet the transaction has the ap- 
pearance of proving that the capitalist has the amount 
paid as wages outstanding till he is enabled to com- 
plete and sell the production which the labor has 



THE NATUEE OF WAGES. 97 

assisted to effect. Of tliis circumstance Mr. Mallock 
takes advantage to read Mr. George a severe lecture, 
but, as I conceive, greatly overrates liis triumph — even 
if it were one. For whether wages are drawn from 
a capitalized fund or otherwise depends upon no 
metaphysical deduction, but upon what the payment 
of wages proves to be on analysis. Perhaps Mr. 
George has not been sufficiently careful in that re- 
spect ; but Mr. Mallock has not analyzed such pay- 
ment at all, but treats it as an appearance to be 
accounted for in the easiest way. What is paid as 
wages must be either, 1st, aoi exchange; or 2d, a 
credit, or 3d, an earnest, in the division of some 
co-operative product. 

Now, if it is an exchange, as I admit it may be, 
when the stij)ulation is intelligently and equitably 
entered into, then nothing could be more stupid and 
absurd than to ssbj it was paid from capital Mr. 
Mallock might as well say that when two men trade 
horses without either giving boot, they do it each from 
capital of the other. The workman parts with his 
labor, or the thing in which it is incorporated, and 
the employer parts with his money, or substantially 
the things which the laborer requires for consump- 
tion. If it is an exchange, it is precisely as Mr. 
George asserts — nothing drawn from capital. That 
could only happen if the trade was specially unjust 
or unfortunate to the capitalist. Mr. George does 
not contend that capital in that case might not be so 
reduced by wages. The payment of wages may also 
be a credit, but not if it be a real exchange, unless 
the wages, indeed, were paid in advance, but such is 
not a usual custom ; the laborer, on the other hand, 



98 SOCIAL WEALTH. 

is tlie creditor advancing the labor for a day, a week, 
or even a month or more. 

The hewing and laying of the keel of a ship, to use 
Mr. Mallock's illustration, is one step, and a very 
important one. Certainly, the builder who con- 
structs the ship has the same amount of capital for 
the purpose of building ships as he had before he 
paid the wages of the shipwright, and the cost of 
material, etc., for the keel. And the keel so pur- 
chased is as a keel as truly consumed when it re- 
ceives the transom and ribs, as is the ship when it is 
completed and purchased for a commercial or other 
purpose. If not so, than no step is appreciable till 
the last day's requisite work is done, and the work- 
man who performs that service in. that one day's 
work actually renders to the owner all the capital 
put into it, with the profit or loss as the venture may 
have realized. 

Doubtless, risk attends ship-building and every 
other industrial enterprise ; but that is not the ques- 
tion at issue, but simply whether the capitalist, as 
the operator may be termed, draws upon his fund in 
paying wages to a greater amount than he draws 
upon the capital of the laborer, his labor. If it was 
a question of paying advanced wages, then it might 
be justly claimed that the employer supported the 
worker by supplying the means to purchase food and 
necessaries while he was at work. But Mr. Mallock 
does not make this point, nor would the usual cus- 
tom justify any such claim. On the other hand, the 
means to support life and enable tlte man to work a 
week or a month are owned by himself and expended 
before his wages are received, to say nothing of the 



THE NATURE OE WAGES. 99 

means of bringing up and educating the man to do 
efficient work. Most certainly, then, viewing it from 
its simplest economic aspect, the emploj^er draws 
not from a fund of his own, but from a fund of the 
laborer's, and that before he pays any wages at all, 
and the utmost he does is to return the capital the 
worker has expended. This argument proceeds 
upon the ground of an exchange, which in its very 
nature precludes any conclusion other than that in 
the transaction equivalents are transferred, and that 
as much capital passes to one side of the equation as to 
the other. The matter of risk is another and wholly 
different element with which the nature of wages has 
nothing to do in any way. An exchange, in the esti- 
mates of the 'parties, covers all risks ivhich each may run 
in parting ivith a staple or speculative value. 

There is another view of wages, however, and which 
I think will apply more generally to payment of hire- 
ling labor than either that of an exchange or a credit. 
Its nature is that of an earnest of ultimate co-operative 
division. In this sense only can Mr. Mallock's idea 
that wages are drawn from a fund have any logical 
foundation. And then, they are not drawn from the 
fund of the operator or capitalist, as he supposes, 
but from the fund of the co-operative movement, 
which every industry is in which numbers are en- 
gaged in any line of production, and as we have seen, 
are drawn originally from the capital of the laborer. 
We would gladly welcome Mr. Mallock to the in- 
dustrial side of this great problem, and to that he 
must come or abandon the notion that wages are 
paid from any capitalized fund whatever. 

The only possible circumstance under which I can 



100 SOCIAL WEALTH. 

conceive tliat a man draws upon his accumulated 
means to pay wages, is where he elects to pay a body- 
servant, or some favorite, to do things which are of 
no utility and have no productive result. But surely 
any such plea as that thought suggests cannot have 
heen intended by either of the gentlemen as bearing 
upon the points raised. 

Another of Mr. Mallock's criticisms, relied on by 
him as thoroughly demolishing the positions of the 
reformers he attacks, can be properly alluded to in 
this connection. He endeavors to show that while 
Adam Smith admits that in the primitive stage of 
society the natural wages are the entire product of 
labor, it is only in that primitive state that such is 
the case, and that the moment accumulations take 
place, and a fund is set aside to pay wages, a change 
takes place in the position of the laborer to his work, 
which reverses his relation to the pjroduction, and 
that to realize again the condition under which he 
can have the full result of his production is to re- 
solve society into its original elements, relapse into 
savagism, and again go gathering nuts, picking ber- 
ries, dwelling in huts and caves, and dressing in the 
skins of wild beasts. The illustration, which he 
seems to think quite settles the point, is of Mr. 
George's own showing in regard to the year 1877 in 
the San Joaquin Valley, where, although there was 
great scarcity of grain on account of a failure of the 
crop, when the rains came and a future harvest seemed 
assured those who had hoarded their grain became 
a.nxious to sell, and so the grain thus held supplied 
the need of the cultivators, " set free, in effect 'pro- 
duced, by the work done for the next crop." 



THE NATURE OF WAGES. 101 

Now, althougli Mr. George miglit deserve castiga- 
tion for so careless a slip of tlie pen, if lie used the 
phrase in the sense Mr. Mallock gives it, it is cer- 
tainly very unfair in Mr. Mallock to parade this 
assumed misuse of language as conveying the very 
gist and kernel of Mr. George's reasoning. It does 
nothing of the kind. The sense of his paragraph 
would have been just as complete and conclusive of 
his position if he had left out the word " produced," 
and merely said that the grain was " set free " by the 
fact of its being known that plowing and sowing were 
going on in the valley with every prospect of an 
abundant crop. 

To assume that he meant that " this year's plow- 
ing produces [in an industrial sense] last year's 
crop," as Mr. Mallock asserts, is torturing an oppo- 
nent's words in a manner wholly without excuse. 
The most that Mr. George could have intended was 
that the grain was from this cause brought into 
market, and may be said to be produced in its tech- 
nical economic sense, i. e., in the market at the time. 
My object in these references is not to defend Mr. 
George, who is abundantly able to take care of him- 
self, but to show how utterly Mr. Mallock fails to 
prove, what the whole tenor of his book assumes, that 
landlordism and capitalism are essential and effective 
agents in human progress and enterprise. 

His illustration of dates and the " crystal, which 
is two days' climb amongst the mountains," proves 
the very reverse of what he offers it to prove, for 
the dates are natural productions, and so is the 
crystal. The savage has only to gather either. The 
desire for the possession of the crystal incites him 



102 SOCIAL WEALTH. 

to gather two days' supply of dates instead of one, 
and thus capital begins. But surely the whole re- 
sult of the labor still belongs to the gatherer and 
climber. Only when we suppose this two days' sup- 
plies to have been in the hands of another, under free 
access to the date-trees and to the mountains, could 
we intelligently inquire what would have occurred 
under sensible and honest dealing between the two, 
if they sought to co-operate in the manner supposed. 
The crystal seeker would not have given more than 
the results of one day's search, or half of his two 
days' search, for the two days' supply of dates, for 
he would say to the holder of the dates : "It will 
take me one day to gather the dates, and there is no 
reason why I should give you more than that pro- 
portion of what I may obtain." As the gathering of 
the crj'stals is a comparatively new industry, and 
requires some moral determination and j)ersistent 
purpose, the probabilities are that the crystal hunter, 
rather than the date-gatherer, would claim a differ- 
ence in his favor. This view, which accords with 
Mr. Mallock's idea that the higher forms of industry 
dominate and control the division of labor and the in- 
creased production resulting therefrom, through " the 
directors of labor who begin exactly where their fath- 
ers ended," while " the laborers begin exactly where 
their fathers began," disproves fully any claim of 
capital to limit production even in form. No intel- 
ligible definition of labor, however, can be confined 
jDroperly to that of men who begin exactly where 
their fathers began. The directors of labor are those 
whose intelligent and fruitful labor opens new paths 
to industry and discovers new uses in tlie materials 



THE NATURE OF WAGES. 103 

coming under their inspection, as well as new de- 
vices and the invention and application of improved 
machinery. 

Instead of proving, as he sets out to do, that cap- 
ital is a productive force and " can go on increasing 
and increasing whilst the quantity of labor remains 
stationary," he simply proves that this is all due, not 
to capital at all, which ends where it begins always, 
but " to machinery and the direction of labor," as he 
himself states. What I have to say about machinery 
will be found under another head ; but I may remark 
here that machinery springs not from capital, but 
from the labor of the inventor and mechanic, and 
both the working of the machine and the direction of 
the manual labor are labor both of hand and brain, 
machinery being only a department under the organ- 
ization of labor. It is this higher form of labor, 
associated, but only when associated, with the hum- 
bler, but equally important, manual labor, which 
brings out the hoarded wealth of the past or " pre- 
vious labor," as Mr. Mallock terms it — and which it 
is — and sets it in motion, giving it all the value it 
has. It is inert material as really as the earth or 
any substance derived from it, and has no more to 
do with productive industry and its results than has 
the granite in the quarry to do with chiseling and 
erecting itself into a fine Corinthian column. That 
is done by the designing mind and cunning hand. 

But let us refer again to the man of the dates and 
crystals. We have seen how improbable it would 
be that, in any division of labor in which the crystal 
hunter sought the co-operation of the holder of the 
date capital necessary to enable him to spend two or 



104 SOCIAL WEALTH. 

more days in tlie mouutains, lie sliould be will- 
ing to give the capitalist any more than an equal 
proportion of Lis crystals. By contract, it is true, 
tliey might make the deal unequal; but the usual 
arrangement would doubtless be as I have supposed. 
I can tell Mr. Mallock, however, just when capital, 
in his sense, would appear, and " go on increasing 
and increasing, while the quantity of labor remains 
stationary," and it need not wait for the development 
of higher forms of production and complicated 
machinery to be able to limit labor either. Let one 
of the date-gatherers get a law passed inclosing the 
date-trees, and vesting the title in him, or, in a more 
primitive way, let him, if stronger ph^-sically, or if 
possessed of a more cunningly devised war-club, re- 
duce the other to a state where he becomes willing to 
enter into an agreement to acknowledge as private 
property of the victor all the date-trees wdthin their 
knowledge, and as well the mountains where the 
crystals are found, and though there will be no 
greater quantity of labor performed than before, 
the two gathering each his day's supply, jet since 
the subjected man will jaeld the stronger one-half 
of his gathering, there would soon arise a capitalized 
fund which would support a man in hunting crystals 
not two days but a week, month, or year. This the 
capitalist would loan the other on the certainly lib- 
eral condition that the finder sliould give him one- 
half that he found as proprietor of the mountains, 
and a fourth for the use of the dates required. Thus 
a fund of crystals would arise, which would be more 
endurable and available for more purposes than the 
perishable dates, and become, it might be, a general, 



THE NATURE OF WAGES. 105 

if not legal, tender. Thus we liave capital produced 
and conserved. But what is it ? Simply withheld 
wages, and which the capitalist is enabled to hold 
because, and only because, as a landholder he can keep 
the other from the date-trees and from the mountains. 
And his only purpose in playing landlord as to 
either is to be enabled to do that very thing. We 
may follow up any industry, of however complex 
a character, and we shall find no place where capital- 
ism can come in, except as a usurper. By conspir- 
ing with the directors of labor, the men who organize 
and distribute it, the capitalist may make himself 
necessary to the progress of any line of production, 
and so pretend to limit its particular form. But in 
every instance it will be found to depend upon his 
ability to engross possession of the land, or to avail 
himself of some class privilege or property right, 
which is a creature of special statute or of some 
state device, to shield a class from the operations of 
economic law, and the competition of those who 
would otherwise destroy their monopoly and expose 
the groundlessness of the assumption of a capitalistic 
increase. We can now see how the directors of labor 
begin where their fathers ended, while labor has to 
begin anew. 



CHAPTEE VIII. 

PEIVATE GOODS AND SOCIAL WEALTH. 

One of tlie first observations we make in regard to 
things that we esteem is that they are found to be 
either in the possession of private persons or are 
open to the enjoyment of all. Before any question 
as to whether certain things may be called capital or 
otherwise, the question arises as to the use they 
perform, and whether such use is particular or gen- 
eral, private or social. In the classification of the 
economists, wealth is generally treated as capital, 
which is by some made to include land and labor as 
well. But capital, as thus defined, becomes clothed 
with kingly prerogatives which can only be recog- 
nized by industry to its own enslavement. Only 
recently " persons " were capital, and its usurped 
rights were exercised over them with unlimited 
force. Even then, however, labor was acknowledged 
as the creator of all social wealth, and as we pro- 
ceed it will be made to appear more and more clearly 
that the false forms of pretended capital, so far from 
being social wealth, are but subtle devices clothed 
with legal forms, for definite purpose to abstract 
social wealth to personal uses, and make it private. 

By applying a simple test we shall also find what 
is really wealth and wdiat is only a counterfeit, but 
which is made to pass current in trade, since the 



PRIVATE GOODS. 107 

parties interested in circulating these false tokens 
by some strange infatuation of the people are en- 
abled to have them stamped with the seal of the 
state and their claims enforced by the sanctions of 
statute law, and the whole power of the government. 
If we examine into the forms of what, for the sake 
of distinction, I will call private goods and social 
wealth, it will be discovered, what will appear at first 
a little surprising, that everything which com- 
mands increase, independent of work, belongs to the 
former class, while nothing that belongs to the latter, 
if ive exclude the land nnd labor, will be found to have ' 
that quality or capacity in any degree whatever. 

Social Wealth consists of all those forms of pro- 
duction, in whatever hands, which promote the well- 
being of society ; the garnered fruits of the earth, 
which serve for food, raiment, and shelter to its in- 
habitants, enabling them to subsist, to labor for the 
production of more fruits, and in the social and in- 
tellectual fields to promote the progress and rich- 
ness of the social life. Even economists do not con- 
tend that anything employed in any of these ways is 
capital, or what they are pleased to call an " econom- 
ic quantity." I should except, perhaps, education; 
though, on reflection, it will be seen that this, when 
it becomes exclusive, and, therefore, may be said to 
beget an increase, is a private rather than a social 
possession ; since, if all had equal opportunities of 
education, the advantage in any pursuit which edu- 
cation would confer would be trifling. 

Society has property in whatever adds to the 
general good. Finely improved grounds, with a pict- 
uresque arrangement of trees, shrubs, and flowers, 



108 SOCIAL WEALTH. 

are social wealth, althougli it may also be enjoyed as 
private property ; because it adds to the prospect 
open to all, and gives enjoyment, through the sense 
of sight, to others, as well as to the owner. A well- 
built house, which adds beauty to the landscape, is 
to that extent social property. All forms of wealth 
which are placed within the circle of exchange are 
social wealth, since they add to the supply which 
members of the society require. 

Any of these may be also in private possession at 
the same time. Private wealth and social wealth do 
not necessarily exclude each other in material things. 
The land and all its opportunities, and natural ijroduc- 
tions, are social wealth; but not exchangeable until 
they have been j)rivately appropriated or allotted. 

Private Wealth, or goods, consists of all those 
things which are privately appro]iriated and used, of 
a mat(5rial character, and of all those rights over 
things which society recognizes and enforces, whether 
wisely or unwisely. 

The latter class embraces those forms of private 
wealth which jield income without work. Without 
labor no income can be had, of course, as that creates 
all wealth ; but it is from tlie labor of others that the 
capitalist is yielded an increase, and not otherwise. 

A distinction between private and social goods is 
seen in t]ie nature of their use or service. That 
which serves the personal use only may be said to 
be private. That which serves social use wholly or 
mainly is social, while that which serves both a 
social use and a private use as well is both social 
and private. Another distinction important to be 
drawn is that the existence of wealth wliollv social 



PEIVATE GOODS. 109 

has an interest for the private individual; while 
that which is wholly private need have no interest 
for society. For example : If social Avealth is de- 
stroyed the whole peojDle suffer each a loss corre- 
sponding to his personal interest, or .as a member 
of the society. On the other hand, the destruction 
of purely private property, under capitalistic domi- 
nation, is often not a public loss, but a public gain, 
as we shall see. 

Private property, under existing capitalistic in- 
stitutions, is largely the creature of law. Some of 
this law is consistent with natural law ; but a large 
proportion of it is entirely inconsistent with any 
natural principle of law whatever. For instance, 
that which makes property of the land dependent 
on a commercial sale, and registered deed, and not 
upon occupation and use ; which falsely assumes 
ownership of what, one is not in possession of, but 
another. That which enforces, against the ignorant 
and incompetent, the fulfilment of contracts they did 
not understand, and were unqualified to make. That 
which enforces payment for privilege of any kind, 
whether of tilling the land or of emplojdng the pro- 
ductive forces of nature in a way to produce wealth. 

We have seen that social wealth was not of a kind 
to yield increase without labor, unless we embrace 
the land in that category, which is not productive 
without labor in any economic sense ; that all forms 
of wealth or capital, which yield such increase, are 
also private property ; and we shall see that these 
are all of a class whose destruction would not reduce 
by one farthing the social wealth of the world. In 
1860 there were some $2,000,000,000 worth of private 



110 SOCIAL WEALTH. 

property in this country, in the form of rights to 
" chattels personal," belonging to a class of capital- 
ists in the southern states of the Union. For want 
of manly statesmanship on either side to treat the 
issue which then arose in a rational way, civil war 
resulted and the insfitutlon -was abolished "as a war 
measure. Now, this was, doubtless, a great hardship 
to a few individuals, but by the destruction of these 
two billions of property no social wealth whatever 
suffered. There was just as much land, just as many 
laborers, and just as much capacity of production, 
and just as much food, raiment, and shelter as before. 
If war reduced property in either section, that stands 
to the account of the war, not to the fact that slavery 
was abolished. It is now admitted, I think, that the 
landholders, with their lands retained, are better off 
than they were ivifh both their land and slaves, and by 
the cultivation of the same land and the same capital 
realize better incomes from hired labor than they 
ever did from slave labor. As capitalists, however, 
they had this complaint to make, that it gave the 
newcomer an advantage, for, with the same capital 
in land, tools, seeds, and improvements, which the 
former slaveholder possessed, including slaves, he 
could work more effectually, as he would have the 
amount formerly invested in slaves, to increase the 
extent of his plantation, and the effectiveness of his 
management. 

But what is true of the property in slaves is true, 
also, of property in land, considered and administered 
as trading capital. This, like slavery, depends wholly 
on municipal law for its existence, and if abolished 
by proclamation to-day could not in any way affect 



PEIYATE GOODS. Ill 

the productiveness of the land or the effectiveness of 
the labor. The testimony of all authority, as well as 
experience, is that the land which is owned by its 
cultivator is the most productive. But besides title 
deeds, which confer dominion without occupation, 
we come now to a large class of private property 
which is even more shadowy, but which has the power 
to lay labor under constant and most onerous contri- 
bution. I refer to mortgages and the numerous 
evidences of debt, which are made commercial cap- 
ital and have no purpose or use except to draw rent 
or interest from the annual productions of labor. It 
would be instructive to get at the real extent of this 
form of capital ; but unless the people are prepared 
to act upon the subject by the knowledge which is 
involved in every-day experience, and in nearly all 
business transactions, and must be generally familiar, 
it will be of little service to give an array of tabu- 
lated statistics, showing the actual amount, and which 
is constantly increasing. But for failures and bank- 
ruptcies, which are constantly going on, and which 
are owing mainly to the absorption of this system, 
they would soon far exceed the entire social wealth 
of the country in nominal value. Macleod estimates 
the amount in England at more than $30,000,000,000. 
And they now quite equal in this country the value 
of everything but the value of the land, which is it- 
self a fictitious value, created by our law of land. In 
addition to the large properties which are rented in 
city and country, a large part of the farms, work- 
shops, and dwellings not rented are under mortgage. 
There are the bonds of the national, state, and munic- 
ipal governments, a vast sum which draws interest 



112 SOCIAL WEALTH. 

from labor, which has discharged its public duties, to 
pay capitalists for shirking theirs. Our political 
system enabled the capitalist to create annuities for 
themselves out of the disasters of our civil war, while 
it took the service of the laborer, artisan, and clerk, 
at a bare subsisting stipend, and their lives as a sac- 
rifice to the integrity of the union. Then there are 
the bonds of the railroads, three and a half billions, 
and their stock, four billions more, much of which 
represents no actual wealth, but which is empowered 
to draw the customary increase. Then there is the 
whole bank circulation, which is let out to business 
and mere speculative enterprises, upon which the 
banks draw interest, at the same time drawing from 
the government interest upon the bonds, upon whose 
security the circulation is based, as if two men should 
exchange notes, and the one whose credit and re- 
sponsibility alone gave value to either were to pay 
the other interest on both. 

All the above-mentioned forms of capital, if wealth 
at all, are private, not social wealth, and they might 
be all burned to-morrow without destroying the least 
portion . of actual wealth, except as to their value as 
waste paper. And they will all cease to be property 
or capital at any moment when the municipal law 
shall be annulled which made their existence possi- 
ble, o¥ the power of the state to enforce these arti- 
ficial rights be withdrawn. It can certainly require 
no further argument to show that these forms of 
wealth which alone yield increase are the creatures 
of the municipal law, and have no foundation in the 
law of exchanges or of social comity. 

That people might be indebted to one another 



PRIVATE GOODS. 113 

Tinder strictly economic law may happen. But so- 
ciety has nothing to do with that, except to see that 
no wrong is done by it. It cannot guarantee in- 
crease, because that can arise from nothing which 
society can recognize as wealth. Exchange refers to 
the interchange of commodities. An agreement to 
pay a certain sum of money at a given time, except it 
constitute an exchange, is not a social act, and society 
cannot be properly asked to enforce it. If there is 
an exchange, and property is given for the note, then 
the note is payment, as shown conclusively by Mac- 
leod, though not "satisfaction." The two have made 
their bargain, and we must presume it is satisfactory 
to both sides. If either party has deceived or mis- 
represented the nature of the thing he has exchanged, 
whether the commodity or the promissory note, then, 
and then only, it becomes a matter for social arbitra- 
tion. If they had " swapped horses " in good faith, 
and one of the horses should die shortly after, or 
turn out valueless, the law would not interfere to 
rectify the mistake. No more should it if a note 
taken in payment turns out worthless. Only upon 
the ground that fraud or misrepresentation has been 
employed has society any excuse for interference. 
Already the logic of this position is recognized by 
our bankrupt laws, and in our statute of limitations 
which refuses to enforce collections after a certain 
time has elapsed. But as to enforcing the collection 
of any interest or increase, society cannot do it, how- 
ever solemn and formal the contract, without becom- 
ing the ally of a vice which is destructively unsocial 
and antagonistic, as well as economically absurd. 
lu the distinction between social and private 



114 SOCIAL WEALTH. 

wealth, we have the natural limit of societary in- 
terference in regard to property. Society is under 
every obligation to giTard the common weal. It 
has nothing to do with strictly private goods, or 
private rights, except to protect its members, in the 
enjoyment of them, or such of them as are clearly 
within the realm of natural law. It has nothing to 
do with the creation or bestowing of these rights. 
Any such attempt betrays usurpation or conspiracy. 
The utmost it can lawfully do is to define those rights, 
and their limitations. It cannot broaden or extend 
them in any direction without encroaching upon and 
subverting the social right. It can only confer a 
franchise upon one to assume an exceptional control 
by sacrificing the social right, or subjecting other in- 
dividuals to be plundered and wronged. 

Having shown in what consists social wealth, as 
distinguished from private wealth, let us see if we 
can trace the history of its production or increase. 
We have placed land and labor in this category for 
convenience in making clear the distinction. Keally, 
as we shall see in the section on capital, they are the 
only natural capital. In speaking of the increase or 
production of social wealth they are necessarily ex- 
cluded, since neither can be said in any economic 
sense to be produced or procured. The extent of 
private, production of goods is very narrow. By him- 
self a man can do little to increase his store. How- 
ever a Crusoe might succeed on an uninhabited 
tropical island, he found the association of another, 
even an ignorant savage, a very desirable aid. In 
artificial society the individual is still more depen- 
dent on social co-operation. So accustomed are we 



PKIVATE GOODS. 115 

to reap the benefits of social life that we seldom 
reflect upon the advantages we derive from it, even 
in the supply of our most constant needs. On re- 
flection, we shall find that but a few of them are 
supplied by our own direct, unaided effort. The 
simplest productions are the result of a combination 
of labors. And yet the individual, particularly if 
successful in obtaining a large control, is liable to 
think that he does it all. How little he does, and 
how much depends on the assistance and co-opera- 
tion of others, is seen in the simplest exchange. The 
thing itself he wishes to exchange has been produced 
with the assistance of a number of persons. Then 
the thing he desires in exchange has been produced 
in like manner by a number of conjoint efforts. 
Again, the services of the dealer, the forwarder, and 
the carrier are all requisite to the exchange v/hich 
he makes. If one of these fail the exchange fails. 

Now, in carrjdng on an extensive operation of 
course these combinations become extremely com- 
plicated. The more numerous are the services re- 
quired in the production, and still more numerous 
the services in providing the things or means to 
maintain the demand. Hence, it is mutual needs 
and mutual services which make any important 
transaction possible. Not only, therefore, is all 
productive industry co-operative, but all exchange. 
It may be to the interest of individuals at any 
point in the circle of production or of exchange 
to ignore the social claim, and extend the individual 
right or control, so as to force unequal division ; but 
it must ever be the social interest to guard the social 
control by such limitation of the individual as will 



116 SOCIAL WEALTH. 

make the division, as well as tlie production, operate 
conjointly and equitably. 

Herein lies the true, because natural, basis of co- 
operation. It has ever been present in the produc- 
tion of the goods of life, and has only failed in 
exchange and division of these goods by falses in the 
treatment of the productive factors, and by the sub- 
jection of the social wealth to private domination. 
By the creation of rights, based on false premise and 
l^retended contract, the division of the results of 
social production has become most iniquitous and 
unequal. Under the pretense that an enterprise re- 
quiring numbers to prosecute it is private, not co- 
operative, a system of division has been adopted 
which for injustice is simply defiant of all sense or 
logic* The many who do the work are paid such 
wages as the market compels ; the one or few who do 
the planning and furnish the plant take the balance 
as profits, interest on stock, or rent of premises. The 
man who invests his labor and perils life, as in the 
mines or manufactories which tend to shorten life, is 
paid a certain rate of wages as long as he works, and 
no longer. The man who furnishes plant or rents 
the laud or loans the money not only is paid for 
whatever service he renders, but becomes entitled, 
under pretense of having contributed productive 
capital, to share in all future production of the vent- 
ure, and his children after him to endless gen- 
erations. 
• 

* The practical consequences arising from tlie condition of industries 
in this and otlier countries are not such as, for my part, I sliould find it 
easy to reccmcile witli any standard of riglit generally accepted among 
men. — Prof. J. E. Cairnes. 



PEIVATE GOODS. 117 

But surely something is due to all tMs plant, and 
to the service he has rendered in promoting business 
and giving employment to labor! That there is a 
demand for this particular production is an essential 
presupposition, so that he does not give his workmen 
employ, or even himself. Social or co-operative in- 
dustries have alone made this possible. Tliis is 
wholly independent of anything on his part, or that 
of his co-helpers, except as they may become pur- 
chasers and consumers themselves of the joint prod- 
uct. An entire half of this industry, then, is wholly 
independent of the operator, toward which he has 
contributed nothing. As regards the supply, let us 
analyze carefully the steps taken, and the nature of 
every element involved. We will suppose it is the 
mining of coal, so as not to confuse the mind with 
too complicated relations. 

In the first place, the land under which this mine 
is situated is the social heritage. It may have been 
devoted to agriculture, and while cultivated by the 
proprietor may have been regarded as private prop- 
erty. But it is now used as a mining property, and 
as such is a social one, for one man can do nothing 
in the business excejDt, perhaps, to dig out a few 
coals for his own use. He must have helpers, asso- 
ciates, or co-operators. This is not a matter of 
choice, of trade, and agreement, which he and they 
can determine by private negotiation. It is only as 
to the particular persons who shall join him in the 
work that there is any election. He must have 
others to co-operate with him, or there is no produc- 
tion. Now, can any such compensation as the capi- 



118 SOCIAL WEALTH. 

talists receive be awarded to the other co-operators 
or joiut producers ? 

The question of comparative compensation does 
not arise here. The one is wholly different in char- 
acter from the other. The management and super- 
intendence may be vastly more useful than that of 
the common labor ; it is labor still. That does not 
touch the question. The salary might be a i3rincely 
one, and yet not involve the inequity under review. 
This is not a salary of a person or worker, but of an 
ifiert thing, for which the fraudulent claim is put forth 
of being a producing means, or factor. The risks of 
the venture may be guarded against by insurance, 
paid from resulting production, and all consumed 
material may be replaced, and yet, under the false 
system of division, an income to the holder of the 
property will be adjudged which will nearly or quite 
equal the entire wages of the employees, not for one 
3^ear, but indefinitely. 

Quite recently, a considerable manufacturing con- 
cern, under the guise of a " community," claimed to 
have " solved the labor question," though, really, 
they had only ignored it. In their annual report 
they showed that they had realized for the commu- 
nity no more than they had paid their employees ; 
and since the community, men, women, and children, 
were about the same in number as the operatives, 
most of whom had families, however, they deemed it an 
instance of fair dealing and equitable division worthy 
of public notice and imitation. Following the sug- 
gestion, I instituted inquiry among several manufact- 
uriug establishments, regarded as successful, and 
was surprised to find that in nearly every one the 



PRIVATE GOODS. 119 

account of profits coincided with tolerable accuracy 
with the wages account, however large or small the 
number of employees. 

That such results can be shown may to some 
minds afford evidence that the inert capital should 
receive a share in the division ; but we must re- 
member that, although some industries protected by 
the state under patent right or corporate monopoly 
will show a much greater share to false capital, often 
yielding to one thousand dollars annually as much 
as to the entire year's work of a man, a great major- 
ity of the enterprises in business not only yield no 
return for the use of tools and plant, other than to 
keep them whole, failing in many instances to do 
even this, but reward the toil and application of the 
operators with a bare subsistence. And hence the 
struggle iov ^rst place, in every profession or occupa- 
tion, and for governmental protection against compe- 
tition, which tuould not take place if cap)italized goods 
yielded an increase. For, in that case, every holder 
of goods would be in possession of an income with- 
out work or business of any kind, as is a holder of 
government bonds or other funded obligations. Such 
parties could not fail in business or come into com- 
petition with each other. 

This plea of the productiveness of wealth is evi- 
dently an afterthought of capitalism to justify what 
is rationally and economically unjustifiable, and to 
cover the naked deformity of profits, interest, and 
rent, which had their origin not in any principle of 
mutual reciprocation, but in a forceful domination, 
in cunning false pretense of service, and the down- 
right trickery of trade. It could by such means 



120 SOCIAL WEALTH. 

only divert attention from the plain truth in the 
matter, which is that the whole of social production 
is co-operative toward which the employees have 
contributed each a certain number of days' worji, 
and the proprietors or operators a certain number 
of days' works, or the products of a certain number 
of days' works. And this is conceding that the tools, 
plant, and other items contributed under the name 
of capital are really the products of their holder's 
labor; whereas, it is well known that they are more 
commonly the withheld shares justly due to labor in 
previous operations. But we need not complicate 
the present illustration with that consideration. 
Now, with the contributions as above stated, who 
are the producers and, therefore, owners of the new 
and resultant production? Unquestionably the 
contributors, in proportion to what they have con- 
tributed, which is co-operation. Any other division, 
though it may follow co-operation in production, is 
exploitation of one class by the other. In a just 
division, the furnishers of the plant would receive 
again, as their share, the plant, at such estimate as 
will cover their decrease in value, and the wear and 
tear of tools, machinery, etc., which have been con- 
verted into goods. Thus to each day's work con- 
tributed a day's product will be awarded ; a day's 
work siguif^dng not so many hours' labor of each, 
but that proportion which such labor bears in utility 
to the whole number of days' work performed or 
contributed. 

But, if the capitalist should claim something over 
and above what he has contributed, then should the 
labor of the worker have something over and above 



PRIVATE GOODS. 121 

tlie product of liis labor, wliicli is an absurdity. 
Tlius we arrive by another and independent course 
of reasoning to the same conclusion, that for any 
one to withdraw from any co-operative production 
more than he has put into it is irrational as well as 
unjust, for no reason can be given why one who has 
put his labor into the current process should not 
receive an annuity from that as well as the one who 
has put in the product of the labor of former years. 
The impossibility of carrying out such a plan proves 
the error of awarding profits to investments of any 
kind. The question of inducement to engage in pro- 
ductive enterprises, and the claims in regard to time 
and use of the reproductive forces of nature and of 
exchange, are sufficiently discussed under the sec- 
tions in regard to rent, interest, and profits. 

The last resort, in support of these self-contra- 
dictory claims, is the sacred nature of contract, and 
the fact that the worker, having contracted with the 
operator to regard his daily wages as a full settle- 
ment of his claims as a copartner in the co-operative 
production, therefore the division is equitable and 
just. It will be readily seen, however, that such 
contract is void for several reasons. In the first 
place, it is made by the employee in ignorance of his 
rights, and not as a sale of his interest in the busi- 
ness, but as wages. If one partner were to make, 
certain weekly or daily payments to another partner, 
that would not prevent the latter from claiming his 
share in the ultimate division ; certainly not, unless 
it was so expressly stipulated. In the second place, 
the contract is made under duress. The worker 
being evicted from his natural inheritance, the land^ 



122 SOCIAL WEALTH. 

is not in a position to make a binding contract. He 
lias no otlier opportunity of employment, but sucli 
as lie is compelled to accept from liim who lias 
usurped the dominion of the land, his natural inherit- 
ance. He has no resource but to sell himself and 
labor at such price as the holder of his patrimony 
offers. The reasoning which urges the wage contract 
is nearly akin to that which placed in our national 
compact a clause about " j)ersons held to service," 
itself a relic of the barbarism which attempted to 
justify slavery, on the civil ground of contract. I do 
not say that wages, under equitable conditions, 
might not be a tolerable method of division of the 
results of co-operative industry; as where a man 
was in possession of sufficient land to employ his 
labor, and where the principle of copartnership had 
become the ruling one in the line of industry he en- 
gaged in. A contract, under such circumstances, 
might be intelligently made, but under monopoly of 
the land and consequent capitalization of goods and 
money, it would give not the remotest intimation of 
any rule which science or equity can recognize. It 
results not only in giving an extremel}^ low or an 
extremely high proportion for services of equal 
utility, but it is governed by no principle of recipro- 
cation, or even by demand and supply, though often 
by the sheerest arbitrary will. 

In treating of the production of social wealth we 
have necessarily referred to division and exchange, 
as they are connected with it. If present division 
is correct and scientific, then it must be admitted 
that production proceeds from capitalization of 
goods and not from human co-operation, as I con- 



PEIVATE GOODS. 123 

tend. In tlie natural sequence, production stands 
first, then ownership, or the division of the product 
among the co-operators. It is not till after the 
goods have been produced and the division has taken 
place that exchanges can take place ; because, till 
then, no one has anything to exchange. Agreement 
may be made, it is true, in regard to things in course 
of production or in contemplation. But it is the 
goods, after production and division has taken place, 
which are really exchanged. Exchange, therefore, 
can have no place in determining who has produced 
the goods, or how they should be divided, since all 
that is decided before they enter its circle. That 
the prospect or' opportunity for exchanging may have 
the effect of stimulating certain lines of production 
is true ; but it is only when they are produced and 
the ownership determined, by whatever system of 
division, that they come under the rule of the com- 
mercial principle. So that, however exact and un- 
questionable the " science of exchanges " may be, 
and in proportion as it is exact, will the question of 
industrial production and its ownership be beyond 
and independent of it, and the more important will 
become the problem of determining the exact relation 
between private goods and social wealth. 



CHAPTER IX. 

LAND OWNERSHIP. 

The proper distribution and control of the land is 
the most important subject of a political or econom- 
ical nature to which any people can direct their 
attention. Upon the accuracy of its solution de- 
pends the degree of civil and social development 
to which they will attain. Politics, civil law, and 
social economics will all be shaped and colored by 
the system of land tenure. It is not appropriate to 
the scope and limits of this treatise to enter into an 
investigation of the various theories of laud owner- 
ship which have obtained in the world. We can 
only give them a passing allusion in our endeavor to 
ascertain what principle of law underlies them all, 
and how this has been gradually developed in the 
general history of land tenure. 

That originally the right to enter and enjoy the 
laud was the common birthright of the people of any 
and all countries is taken for granted, no one con- 
tradicting. Blackstone says, "There is no founda- 
tion in nature why a set of words upon parchment 
should conve}' the dominion of land. . . . While the 
earth continued not densely populated, it is reason- 
able to suppose that all was in common. Thus the 
land was in common, and no part of it was the per- 
manent property of any man in particular; yet 

m 



LAND OWNEESHIP 125 

•whoever was in possession or occupation of any de- 
termined spot of it acquired for tlie time a sort of 
ownership, from which it woukl have been unjust and 
contrary to the law of nature to have driven him 
away by force ; but when he quitted the use or occu- 
pation of it another might take possession of it with- 
out injustice to anyone." 

Says John Locke : " The earth and all that is 
therein is given men for the support and comfort of 
their being, . . . and nobody has originally a private 
dominion exclusively of the rest of mankind." 

Say says : " It would seem that lands capable of 
cultivation ought to be regarded as natural wealth, 
since they are not of human creation, but nature's 
gratuitous gifts to man." 

M. Ch. Comte says : "These lands '(extended tracts 
not yet 'converted into individual property') which 
consists mainly of forests, belong to the whole pop- 
ulation, and the government, which receives the 
revenues, uses, or ougM to use them in the interest 
of all." * 

It is wholly unnecessary to examine the grounds 
which are given by economists and writers on civil 
law as to the basis of private property in land, for 
they are so contradictory as to be really self-destruc- 
tive. Possession remains possession, and can never 
become property, in the sense of absolute dominion, 
except by positive statute. Labor can only claim 
occupancy, and can lay no claim to more than the 
usufruct. If labor gave a property title to the land 
in any such absolute sense, then it would oust all 

* Prouuhou says of tliis reservation, " It saved the telling; of a lie." 



126 SOCIAL WEALTH. 

other proprietorsliip than its own; because, without 
the continuous application of labor, land has no value. 
The " right of discoverj '' is not seriously advanced 
now, although it was the basis on which this conti- 
nent was parceled out. We shall see, moreover, that 
private titles to land have arisen in none of the ways 
which have been relied on for its justification, but in 
a manner inconsistent with each and every one of 
these hypotheses. Comparatively late investigations 
have proved beyond all question that private prop- 
erty in land has been developed in all modern 
nations from a collective ownership. Sir Henry Sum- 
ner Maine, in his " Village Communities," summarizes 
the results of his own investigation, as well as that of 
other recent authors, thus : " It would seem that light 
is pouring from* many quarters at once on some of 
the darkest passages in the history of hxAV and of 
society. To those who knew how strong a presump- 
tion already existed that individual property came 
into existence after a slow process of change, by 
which it disengaged itself from collective holdings 
by families or larger assemblages, the evidence of a 
primitive village system in the Teutonic and Scan- 
dinavian countries had very great interest ; this in- 
terest largely increased when England, long supposed 
to have had since the Norman Conquest an excep- 
tional system of property in land, was shown to 
exhibit almost as manj^ traces of joint ownership 
and common cultivation as the countries of the North 
of the continent ; but our interest culminates, I think, 
when we find that these primitive European tenures, 
and this primitive European tillage, constitute the 
actual working system of the Indian village commu- 



LAND OWNERSHIP 127 

nities. . . . One stage in tlie transition from col- 
lective to individual property was reached when tlie 
part of the domain under cultivation was allotted 
among the Teutonic races to the several families of 
the townships ; another was gained when the sj^stem 
of ' shifting severalties ' came to an end, and each 
family was confirmed for a perpetuity in the enjoy- 
ment of its several lots of land. But there appears 
to be no country inhabited by an Aryan race in which 
traces do not remain of the ancient periodical re- 
distribution. It has continued to our day in the 
Russian villages. Among the Hindoo villages there 
are widely-extended traditions of the practice, and 
it was, doubtlessly, the source of certain usages, to 
be hereafter described, which have survived to our 
day in England and Germany " (Y. C, pp. 61, 62, 
8i; 82. 

Law, as it practically affects society, has been de- 
veloped as the result of two tendencies which oper- 
ate to modify, if they do not limit, each other. The 
first is the reason derived from experience, which 
begets general consent to such certain " rules of 
conduct" as are discovered to, be necessary for the 
well-being of the family, village, or other social ag- 
gregation. The other is the desire for dominion, 
the assertion of the loill on the part of the individual, 
class, or party, according to the form of the control- 
ling power. 

True law, we need hardly say, is that "rule of 
action " which conforms to justice and equity. "No 
human laws," says Blackstone, " are of any validity 
if contrary to the law of nature ; and such of them as 
are valid derive all their authority, mediately or im- 



128 SOCIAL WEALTH. 

mediately, from this original." But since the prog- 
ress of society is one of growth, in which a knowl- 
edge of nature's laws is gradually discovered, and still 
more tardily apj^lied, we can expect to find only such 
principles of law applied in primitive societies as are 
readily seen and comprehended. Under the mere 
rule of will we may also expect to find often utter 
perversion as well as ignorance of these laws. 

History does not enable us to trace land owner- 
ship) to its primitive source. In the earliest stage 
known to us, we find the household under control of 
the unlimited authority of the owner, including alien 
slaves, with power of life and death over all, not- 
withstanding the equality which existed between the 
owner and the numerous proprietors of the common 
domain. 

The present purpose is to inquire into the nature 
of this early system of holding. The ownership of 
slaves had been effected through ignorance or very 
imperfect application of natural laws, and of that 
complex social relation of all human kind which at a 
later day has been recognized and to a certain extent 
applied under civil rule. The testimony is conclu- 
sive that the form of land ownership earliest known 
to history was that of a common possession. The 
law relating to this ownership has come down to us 
unchanged, materially, through all the revolutions in 
systems of civil and political rule, and through all 
the mass of enactments and decrees with which leg- 
islatures, monarchs, and courts have encumbered the 
various systems of jiirisprudence. That private 
ownershi]) followed closely the recognition of the 
common right to land there can be little doubt. At 



LAND OWNEESHIP. 129 

first it may be tliat a community of goods existed 
along with community of the ownership of the land. 
But this must have been soon followed by the setting 
off a mark for the village, in which each family had 
a separate home. Over this and the lot it occupied, 
it had dominion, as nearly absolute as any right can 
be. Then came the arable mark, in which each 
householder had a lot in each of three several fields ; 
two for the rotated crops and one for rest, or the 
fallow. These lots were used by the householder 
for his own and family's behoof ; but was subject to 
the control of the community, which required uni- 
formity of crops and of culture. The fallow, and 
even the stubble, of these fields were subject to be 
pastured in common, as well as the balance of the 
domain, which was embraced in the common mark. 

It would seem that private occupancy of the land, 
to the extent we have seen, was nearly coeval with 
that of private movable property, property being 
used not in what economists and jurists term " the 
highest form of property," but rather that which 
constitutes possession or ownership merely. That 
separate holding should follow common ownership 
was inevitable. Otherwise society would have be- 
come petrified, and all progress arrested. There is a 
tendency in the community to develop a despotic 
leadership. This, in early times, took on a form of 
hereditary rule, even where the elective franchise 
was retained. R. B. D. Morier shows* that there 
existed a strong tendency among the Teutonic races 
to convert a "public duty to a private right," and 



* Agrarian Legislation of Prussia. 



130 SOCIAL WEALTH. 

that monarchy and private dominion grew up from 
tlie same root, so nearly related that it is difficult to 
say where the one becomes distinct from the other. 

From the village community colonies were formed, 
and occupied unappropriated lands, the mother vil- 
lage assuming and exercising a certain control over 
the daughter villages. This, in connection with 
military authority and rights of conquest, resulted in 
the formation of the manor ; and, finally, in the 
medieval feudalism from which the English land 
system particularly has been derived. In accordance 
with the monarchical assumption, a legal fiction was 
invented to give validity to usurpation of the do- 
minion of the land, by the custodians of popular 
rights, in flagrant betrayal and violation of their 
trusts, and all titles were, through this pretense, de- 
rived from the crown. 

When this country declared its independence of 
Great Britain, the proprietorship, as regards the 
public domain, was assumed to be in the whole 
people. We see now that, so far as dominion over 
the land is concerned, the political and civil basis 
is the same. A sovereign presujjposes a domain. 
Sovereignty and proprietorship of the land are 
inseparable. So that, in parting with the pro- 
prietorship of the land, the people have virtually 
abdicated their sovereignty, or rather our public 
servants have betrayed their trusts, and have con- 
verted what was a public into a private right. And 
our courts, instead of enunciating and applying the 
natural laws of the subject, have deferred to the 
English common law and the Eoman civil law, both 
of which J through forced interpretations, as regards 



LAND OWNERSHIP. 131 

the dominion over tlie land, are but a perpetuation 
of tlie barbaric and brutal usurpations of a semi- 
savage age. 

Political equality, as well as equality before tlie 
law, are practically impossible unless the common 
right to the land is recognized and secured. The 
conservative instinct which, under popular forms, 
sought to confine the elective franchise to real pro- 
prietors, was legitimate under the state of the land 
system, as it has been allowed to exist. The mistake 
consisted in the admission of a system which per- 
mits any person to be deprived of his portion in the 
ownership of the land who has a voice in the direc- 
tion of public affairs. But we wish, now, to look at 
the results which followed the application of labor 
under what appears to have been the primitive form 
of ownership, equal rights of occupancy, even where 
separate holdings had arisen. In the simple com- 
munity, each contributed according to his ability, 
and received from the common fund according to his 
need ; but as soon as separate property was recog- 
nized in movables, separate holdings followed as a 
necessary consequence, especially in respect to so 
much land as was necessary to the private home. 
The great domain was still common. The arable 
mark, even, was subject to the control of the common 
will, as to the kind and rotation of crops. Under 
feudalism and the " divine right " the crown lands 
still remained common, and it is only within a cen- 
tury or two, under " the Enclosure Acts " of Par- 
liament, that in England, even, the common or crown 
lands were wholly given up to the dominion of a 
class to the complete exclusion of the people. 



132 SOCIAL WEALTH, 

Under equal ownership of the land, doubtless, 
" the laborer received the whole product of his 
labor." This is what Adam Smith calls the "Natu- 
ral Rate of Wages." Ricardo, on the contrary, de- 
fines the natural rate to be the minimum necessary 
to his support, and to enable him to rear offspring. 
This latter rate evidently applies to the laborer only, 
who has been despoiled of his heritage in the soil, 
and hence subjected to a forced competition, since it 
would be impossible to reduce one to that condition 
who held land. His natural wages are now, under 
this usurpation, the same as what to his master is 
the expense of a chattel slave. The only object of 
alluding to this question here is to emphasize what 
really the position of the laborer becomes thus di- 
vorced from his natural heritage. It is of no impor- 
tance as to which is right, Smith or Bicardo, since of 
the independent worker, upon his own acres, it might 
be said that the minimum expense of his living was 
the natural cost of his labor, and what he realized 
over that was po^oft. But what is of importance, in 
any system of division with the least pretension to 
accuracy, is that what went to the laborer under a 
common ownership of the land Avas the whole povduct 
of Ms industry. And upon this question there is and 
can be no dispute. 

Combination in labor and recij)rocal exchange of 
services furnish the key to all social or human ad- 
vancement. In the division of the results of such 
associated labor, products would be awarded j^ropor- 
tionally to labor performed. This applies to fami- 
lies, which constitute the social unit. As individuals 
within the family, it can only apply, of course, to 



LAND OWNERSHIP. 133 

those wlio are able to work, the children, to a certain 
age, being a charge to their parents, or in a broader 
community, to the community itself. 

Admitting, as we must, that all had originally 
equal rights of access to the earth, and that no one 
possessed any right to dispossess or prevent another, 
we are unable to find justification for any law or 
custom which attempts to exclude a single member 
of the human family from a share in the common 
domain. Whatever may have been held in barbaric 
days, as to the "law of the stronger," "the rights of 
the victor," etc., no such right of dispossession can 
be pleaded now. Whatever may be claimed as to the 
surrender by the voluntary act of the individual, 
though I deem this right to a place upon the earth 
inalienable and indefeasible, the right of the child 
can, in no manner, be transferred, forfeited, or im- 
perilled by any act of the father, nor its relation to 
the land, or to society, be affected in any way what- 
ever. This tenancy of the whole people is not only 
a common tenancy, but to each person it is a life and 
only a life tenancy, into which man " enters " at his 
birth, and " quits " at his death. To deed away 
such a right is impossible. Man may abandon a cer- 
tain separate holding, and another may properly 
occupy it, but he cannot alienate his own " common 
right," which is but for life, much less dispose of 
that of his children and of their children, to all 
generations. In neither law nor equity can a parent 
dispose of the patrimony of his minor child, certainly 
not of those who are unborn. This patrimony is 
held as a trust for posterity under whatever form of 
government, law, or administration, and no betrayal 



134 SOCIAL WEALTH. 

of it by the parent, executor, or state can liold against 
the right of the individual. No acq^uiescence of a 
minor or ward can establish a right, or work a for- 
feiture ; and no defense can be made to this great 
wrong, that the people have submitted to it. On the 
arrival of every minor at majority he has the un- 
doubted right to recover. 

We are able now to judge of the nature of these 
usurpations, and to trace their rise and progress, in 
placing the control of the land into the hands of a 
class, and in excluding the mass of mankind from all 
interest in the patrimony which nature has jjrovided 
in abundance for all. The gradual growth of exclu- 
sive ownership of hereditary rights and settlements 
are traced with great care by a number of writers, 
among whom are Nasse, Yon Maurer, Laveleye, and 
Maine. They show that in the feudal system the 
relation of the serf to the land was recognized, 
although a distinction was made between him and 
the personal chattel or slave, who, as an alien, had no 
recognized claim upon the land. In a number of 
ways, however, the right, not only of the tenant but 
of the agricultural laborer, to a home upon the soil 
and a share of its productions, was recognized from 
the earliest history of agricultural communities to 
the disappearance of the feudal system in the modern 
capitalism. Feudalism resulted as the natural out- 
growth from the village to the manor, and thence to 
the state. In its application to the territory of the 
Roman empire, it was arbitrarily applied by con- 
quest, the old laud holders accepting their lands 
back again on the most favorable terms they could 
make with the conqueror. But under the system as 



LAND OWNEESHIP. 135 

it liad more gradually developed in Germany, Scan- 
dinavia, and Britain, the rights of the people were 
more gradually absorbed. To the very last the land- 
lord holding " land from the crown could not substi- 
tute another person for himself at his own will and 
pleasure without the consent, not only of the crown, 
hut of Ms oion vassals." " A strict military feud was 
by its very essence inalienable, but gradually this 
rigor was relaxed, and feuds were created alienable." 
" In process of time the relation of lord and vassal 
in feudal law changed from a bilateral contract, in 
which there were rights and duties on both sides to 
the simple relation of the modern landlord and ten- 
ant, or a unilateral contract, where there is the 
simple right on one side to demand rent, and the 
simple duty, on the other side, to pay it." This 
change from a tivo-sided to a one-sided contract was 
due, as Mr. Macleod shows in the context to the 
above quotations, out of respect to the commercial 
spirit, so that " estates in land were made freely 
salable and transferable without the consent of the 
tenant " (Elements of Economics, § 38). Morier de- 
scribes the first period of the Teutonic community 
" as the period of land oivnership and eqical possession, 
in which the freeman is a 'miles' in virtue of being a 
land oioner. The second period can be described as 
the period of land tenure, and of unequal possession, in 
which the feudal tenant is not a ' miles ' in virtue of 
being a land oivner, but a land holder in virtue of 
being a ' miles.' " The change herein indicated 
marks the progress of the development of the mili- 
tary spirit and of subjection to its sway of the rela- 
tion between the land and the cultivator. The owner 



136 SOCIAL WEALTH. 

of the manor in eacli township became the president 
of the township court, " so that whosoever owned the 
manor exercised the office of judge, and whoever ex- 
ercises the office owns the manor ;" and to this he 
ascribes " the origin of manorial rights, which after- 
wards become the keystone of the entire land system 
in feudal times, and to this day affect in an important 
manner the agrarian relations of many important 
countries in Europe, England included." This manor, 
he goes on to show, received dues and services from 
the other manors in the township, " even where these 
manors are the allodial property of freemen. '' He con- 
siders feudalism to have been made up of Teutonic 
and Roman elements, the Teutonic idea of the corre- 
lation between possession of land and military serv- 
ice, and the tendency to change public office into 
private right, to transmit such rights by inheritance, 
and to regard honorable personal services rendered 
to the sovereign ; and, on the other hand, of the 
Roman ideas of law regarding "beneficial uses," and 
of dominion in proprietorship of the land. The later 
period, marked by the agrarian legislation of Prussia 
during the present century, he calls " the return to 
free oicnership ivith unequal possession.'" I must quote 
at some length his description of the process by 
which the land-holding peasant was transformed into 
a serf in Germany : 

"As population increased, more and more town- 
ships were settled on the common lands, the propor- 
tion between pastoral as compared with agricultural 
wealth decreased, and the ordinary freeman was 
gradually reduced to a little more than what his lot 
in the arable mark brought him in. Simultaneously 



LAND OWNEESHIP. 137 

with this diminution of his means rose the cost of 
his equipment for the field, and the strain put upon 
his resources by having to maintain himself during 
the long summer and winter campaigns which were 
now the rule. Soldiering under Charlemagne against 
the Saracens in Spain, or the Huns on the Danube, 
was different work from an autumn raid across the 
Bhine. Hence partly by his poverty, partly by the 
pressure, often amounting to force, brought to bear 
upon him by the lords who wished to increase their 
demesne lands, the free owner was little bj little re- 
duced to the condition of an unfree holder. By 
commending himself to a superior lord — that is, by 
surrendering the dominium, directum of his cdlodium, 
and receiving back dominium utile — the freeman lost 
his personal rights, but obtained in return protection 
against the state, i. e., against the public claims that 
could be made upon him in virtue of his being a full 
member of the political community. According to 
the nature of his tenure, he had to render military 
service (no louger as a national duty, but as a per- 
sonal debt) to his superior, and in return was main- 
tained by his lord when in the field; or, if his tenure 
was a purely agricultural one, ... he was exemjDt 
from military service, and only rendered agricultural 
service." 

" In this way, as generation followed upon gener- 
ation, the small free allodial owners disappeared, and 
were replaced by unfree holders. But the memory 
of their first estate long lived among the traditions 
of the German peasantry, and it required centuries 
before the free communities, who, out of dire neces- 
sity, had by an act of their own surrendered their 



138 SOCIAL Wealth. 

liberties into the hands of the lord of the manor, 
sank to the level of the servile class, settled upon 
their demesnes proper by the lords of the soih" 

"In the peasants' war, which followed Luther's 
Reformation, he made a desperate attempt to recover 
his lost liberties ; and in the record of grievances 
upon the basis which he was ready to treat, he showed 
how accurate was his recollection of the past, and 
how well he knew the points on which the territorial 
lords had robbed him of his rights." 

The demands of the peasants were deemed " mod- 
erate " even by the historians of their times ; and if 
in the course of the struggle their unorganized bodies 
sometimes committed great excesses, it was generally 
in retaliation of the infamous cruelties practiced 
against them by the brutal and unprincipled Von 
Waldburg and less significant leaders of the aristoc- 
racy, who spared no age or sex, and who made treaties 
with the purpose of repudiating them and entrap- 
ping the too-confiding peasants. Their demands 
were substantially: " The free election of their parish 
clergy ; the appropriation of the tithes of grain, after 
competent maintenance of the parish clergy, to the 
support of the poor and to purposes of general utility ; 
the abolition of serfdom, and of the exclusive hunting 
and fishing rights of the nobles ; the restoration to 
the community of forests, fields, and meadows, which 
the secular and ecclesiastical lords had appropriated 
to themselves ; release from arbitrary augmentation 
and multiplication of services, duties, and rents, and 
the equal administration of justice." 

But all this moderation was of no avail, and after 



LAND OWNEESHiP. l39 

great sacrifice of life in the struggle, tlie lot of tlie 
peasant became harder tlian ever. 

" The Thirty Years' "War gave the final blow. With 
exceptions here and there the tillers of the soil be- 
came a half-servile caste, and were more and more 
estranged from the rest of the community until, with 
the humanitarian revival at the close of the last 
century, they became to philanthropists objects of 
the same kind of interest and inquiry which negroes 
have been to the same class of persons in our day." * 

This description may serve in a general way to 
portray the courses by which man's natural birth- 
right in the soil has been usurped in every land by a 
domineering class who, sooner or later, sought the 
cover cf pretended law to sanction unlawful acts, so 
that they might enjoy quiet possession of dominion 
obtained by violence. 

In the Russian system, we have a later develop- 
ment still, corresponding in its essential features to 
the earlier feudal form. There the reduction of 
agricultural labor to bondage was effected in com- 
paratively modern times. It is true slaves were held 
at an earlier date by the Czar and the nobles of his 
court ; but those slaves, or their progenitors, were 
captives taken in war. The noblemen who owned 
these slaves were servants of the crown, and not 
land holders or even vassals owing allegiance for the 
tenure of land. Often they were allowed, however, 
an allotment of the crown-land to be tilled by their 
slaves, and their service to the crown was paid in 
that way. " Such nobles as did not own slaves were 

* Systems of Land Tenure in Ynvions Countries, pp. 249, 250. 



140 SOCIAL WEALTH. 

sometimes paid by the Czar's abandoning to tliem 
the yiekl of the taxes due to the Czar by the peas- 
antry of one or more viUages. But such an arrange- 
ment did not legally impair, in the slightest degree, 
the liberty of these peasants. They remained the 
free children of the Czar, entitled legally to break off 
their household, and to separate from their village 
community and to join another whenever they liked." 
*' The Russian peasants of those times were nobody's 
servants but the Czar's, like everybody else in the 
empire." These quotations are from " The Russian 
Agrarian Legislation of 1861," by Julius Fancher, 
whose conclusions I must give in brief. The form 
of tenure and tillage of the land was that of joint 
husbandry of the whole village, that and not the 
family being the social unit, and standing under 
patriarchal rule. " Movable property alone was in- 
dividual ; immovable, the land, at least, was com- 
mon." Colonization was carried on, village giving 
birth to other villages, which in their turn became 
self-sustaining, and gave birth to still others. 

With this system of organization and extension of 
villages is to be considered the savage drama of 
political life of the Russians, the influence of a dom- 
inant church, and external warfare. Military gov- 
ernment in time having been iutroduced, and a 
consequent sj^stem of taxation, the same contests 
arose between private factions, as to who should 
possess the legalized prey, as constitute the political 
part of the history of other nations. With the 
growth of a petty nobility, during the struggle of 
Ivan III. and Ivan IV. the Terrible, to establish the 
empire, the nobles were rewarded with the yield 



LAND OWNEESHIP. 141 

of taxes of such villages as had been allotted them. 
" Villages not being disposed of in such way seem to 
have remained free villages till the later years of 
Ivan lY., who seems to have commenced the prac- 
tice largely resorted to in later times, of turning 
crown villages into villages belonging to the Czar, 
not as sovereign of the country, but as landed pro- 
prietor. Such villages, peopled by prisoners of war 
and their offspring, the slaves of the Czar, must have 
alwa5^s existed. . . . But there can be little doubt 
that Ivan lY., in designating by a legislative act 
which villages were henceforward to be considered 
as state property (Liemschina), and which as prop- 
erty of the Czar [Opritchina), did so for the purpose 
of appropriating what was not his own." 

" The changes effected amounted to this, that a 
very great number of villages having been formerly 
free communities, merely paying taxes to the state, 
had been turned into estates of the Czar and of the 
nobility, on which the peasantry had to pay rent. 
The amount payable remaining unaltered, and the 
person to whom it was to be paid remaining the 
same, the peasantry, perhaps, did not even become 
aware of the change ; they may have considered 
their village as a little socialistic and patriarchal 
republic, just as the bees in the hive are not aware 
that they have other masters besides their queen." 
But they were soon made aware that their ancient 
liberties had departed. An imperial ukase was pub- 
lished forbidding the peasants to quit their village 
without a passport, and ordaining that every peasant 
found wandering about the country without one 
properly signed should be sent back in irons to his 



142 SOCIAL WEALTH. 

villaf^e, and punislied for liaving left without per- 
mission. Though under pretense of preventing 
vagrancy, this ukase was to prevent a loss of the 
power to raise the rent, which increasing population 
Avoiild give. 

" The decisive blow had fallen. It did not at once 
bring about its final results — compulsory labor of 
whatever kind the master demands from his slave — 
but it contained it in the germ, and the development 
was rapid. The first and most important conse- 
quence was that colonization was checked for a long 
time. . . . The whole seventeenth century shows the 
heart of the Russian peasant still paljDitating. The 
enshrined spirit of liberty asserts itself in religious 
sectarian movements, in agrarian risings, in bold 
brigandage, under the seductive form of free Cossack 
life. It was reserved for the eighteenth century to 
consummate the work. The harmless and gentle 
villagers, who, for the love of wife, child, brother, 
sister, and neighbors, had conquered the uncongenial 
eastern plain of Europe for civilization, now disap- 
pear as Avorking agents from the historical records 
of their country ; they have become mere tools to 
work with, mere matter to be worked upon." 

That in England, as well as among the other na- 
tions, private ownership of land owed its existence 
to the betrayal of public trusts may be seen from 
the lavish manner in which its kings distributed the 
public or crown lands. 

Macaulay says : " There can be now no doubt that 
the sovereign was by the old policy of the realm 
competent to give or let the domain of the crown in 
such manner as seemed good to him. No statute 



LAND OWNERSHIP. 143 

defined the length of the term which he might grant, 
or the amount of the rent which he must reserve." 
" For a brace of hawks to be delivered to his falconer, 
or a napkin of fine linen, he might part with a forest 
extending over a hundred square miles." He says 
such acts were common, not only as late as the time 
of the Stuarts, but that their example was followed 
by William of Orange. 

That the idea of common ownership of the land 
held a prominent place in the common mind of Eng- 
land is shown by the fact that the early emigrants to 
the American colonies, who were composed mostly 
of the class of yeomanry, organized themselves into 
village communities to cultivate the soil. "The 
General Court granted a tract of land to a company 
of persons," and it was held in common. The com- 
pany assigned house lots, then tracts of meadow 
land. Pasture and w:oodland remained in common. 
In 1660 the General Court enacted a law confining 
"commonage for wood, timber, or herbage" to those 
houses " already in being, or [which] shall be erected 
with the consent of the town." It was this, or sim- 
ilar restrictions, which gave " the commoners " in 
New England and New York a degree of aristocratic 
power which extended itself far into this century, 
and gave color to many titles to land which were 
destitute of legal, as well as of moral, validity. The 
process of usurpation has been going on with or 
without statute law, and often in open violation of it. 
Our national history in regard to the disposal of our 
public domain has been scarcely more than a series 
of usurpations — grants to railroad corporations ; 
soldiers' bounty warrants ; a device to furnish the 



14A SOCIAL WEALTH. 

market with a script for gambling in lands ; donations 
to the states for colleges and educational purposes, etc. 
But this is but a part of the system which is lead- 
ing our nation headlong in the path trod by ancient 
Kome two thousand 3^ears ago. Like her patricians, 
the capitalists of our time are getting control of our 
domain "legally, if they can,"' but getting it. 

By the statements furnished by Mr. Secretary 
Teller to the House Committee recently, million 
after million of acres of the public lands are being 
fenced in by cattle comjDanies and "ranch com- 
panies " to the exclusion of those who desire to 
settle them under the Homestead law. We are told 
that some of these companies are controlled by for- 
eign capitalists exclusively, among which are the 
Arkansas Cattle Company and the Prairie Cattle 
Company (Scottish), each of which has fenced in 
more than a million of acres.. Already from thirty 
to fifty millions of acres are said to have been thus 
seized. It is true that Congress has passed a law 
making such things " a misdemeanor ;" but such law 
can hardly have retroactive effect. It will at utmost 
be attempted to enforce it only when parties feeling 
personally aggrieved shall make complaint, and then 
the rich companies can put off action indefinitely by 
the employment of learned and influential counsel. 
In time " possession. " will give them title, and the 
courts, although they have violated the law, will de- 
fend them in their claims to the lands as vested 
rights, as they have already done in cases of the rail- 
roads against the poor and uninfluential settler. It 
was in ways quite analogous to what is thus going on 
before our eyes that the Latifundia of Home arose 



LAND OWNERSHIP. 145 

and crushed tlie Roman civilization througli corrupt 
perversion of fundamental law. 

In a communication to tlie North American Revieio, 
a year or more ago, Mr. George W. Julian, who had 
been Chairman of House Committee on Public Lands, 
charged the Congress, Federal Court, and Adminis- 
tration with having pursued a most reckless if not 
corrupt course in regard to the disposal of the public 
lands. Mr. Ex-Secretary Schurz, feeling personally 
aggrieved thereby, replied, attempting to show that 
he was free from censure, and charging back the 
fault upon Mr. Julian, and the Congress of which, at 
the time, he was a member. But they did not dis- 
agree as to the general tendency of the government 
to facilitate the alienation of the lands and to aid and 
protect the capitalistic monopoly of the public do- 
main. The}'^ only differed on the question as to 
which of the two was more culpable, for a state of 
things both acknowledged to be scandalous. Yet, 
under our land system, titles so obtained, or in any 
way obtained, are under present rulings and pur- 
chased interpretations destined to give dominion over 
the land "/oreyer," to the exclusion and impoverish- 
ment of the people in all future time. 

The Eomau law, in regard to Mnd, has been gen- 
erally supposed to favor absolute dominion, unlim- 
ited in extent, to the private holder. The agrarian 
laws of the kings, and of the consuls and tribunes 
under the republic, were suijposed to be " associated 
with the idea of the abolition of property in land, or 
at least of a new distribution of it." This latter 
supposition long continued to furnish apjjarent jus- 
tification for the opprobrium which apologists of 



146 SOCIAL WEALTH, 

class domination and even scholars souglit to cast 
upon that most just and patriotic measure, until 
Niebuhr pointed out that the purpose of the agrarian 
laws was not to interfere with private property in 
the land, but to efl'ect an equitable distribution of 
the public lands among the citizens of Home. It was 
the use which had been made of those lands by the 
military or civil rulers, or by wealthy or influential 
patricians, through the oversight, connivance, or neg- 
lect of those rulers, that rendered the agrarian laws 
so difficult to enforce, and raised up such deadly 
hostility to their application. Dr. Thomas Arnold, 
following Niebuhr, says : " It was the practice at 
Rome, and, doubtless, in other states in Italy, to allow 
individuals to occupy such lands, and to enjoy all 
the benefits of them, on condition of paying to the 
state the tithe of the produce, as an acknowledg- 
ment that the state was the proprietor of the land, 
and the individual merely the occupier. Now, al- 
though, the land was undoubtedly the property of 
the state, and although the occupiers of it were, in 
relation to the state, mere tenants-at-will, yet it is in 
human nature that a long, undisturbed possession 
should give a feeling of ownership ; the more so as 
while the state's claim lay dormant, the possessor 
was, in fact, proprietor, and the land would thus be 
repeatedly passing by regular sale from one occupier 
to another." 

The idea of a citizen and that of a land holder 
were inseparable, and as new citizens were admitted, 
they had to each receive a portion of the unallotted 
public domain. This could be done only by dispos- 
sessing those who had taken possession of these 



LAND OWNEESHIP. 147 

lands Tinder the custom, wliicli it seems vr&s confined 
to the old burghers or patricians, no other class 
being allowed to occupy them. This, with the tend- 
ency of the larger possessions to swallow up the 
'smaller ones, increased the numbers of the landless, 
whose destitution and degradation so greatly in- 
creased that some measures were necessary to be 
taken to prevent anarchy and the dissolution of the 
state. 

It is said that most of the kings introduced agra- 
rian laws; "the good king," Servius TuUius, falling 
a victim to the hostility of the nobles, in consequence 
of his introduction of one Spurius Cassius, a consul, 
proposed a law to give the citizen land out of the 
public domain, and to enforce the payment of the 
stipulated rent by the large land holders, or occu- 
piers ; but as soon as his year of consulship had ex- 
piree], he was falsely accused of trying to make him- 
self king, condemned, scourged, and beheaded, and 
his house razed to the ground. This has been 
aptly and justly termed " an atrocious judicial mur- 
der.'' 

The same law was attempted to be put in operation 
by the Tribunes Macilius and Metilius, but without 
success. Later, Marcus Manlius, a patriotic and noble 
patrician, made an eflforfc to promote an agrarian law, 
and though he had saved the capital during the 
Gallic siege by his intrepidity, was hurled from the 
Tarpeian Eock, on a charge like that against Spurius 
Cassius, equally groundless and base. In 367 B.C., 
after a violent contest of eleven years, an agrarian 
law was passed, through the efforts of Licinius Stolus, 
but though proving of great value was soon overborne. 



148 SOCIAL WEALTH. 

The story of the Gracchi is too familiar to be re- 
peated here. Their temporary success in preventing 
the social ruin of the republic hardly extended be- 
yond the cruel butchery which destroyed them ; and 
reaction, malversation, corruption, and demoraliza- 
tion paved the way for the introduction of the em- 
pire. 

That the pernicious system of landholding which 
obtained in despite of, rather than in accordance 
with, the Roman civil law, was the cause of the sub- 
version of the Roman republic, and of the ultimate 
decline and £all of the Ro^aan empire, there appears 
now no question among historian or scholars. Mal- 
thus treated the British land system as though it had 
been a part of the " laws of nature," and contends 
that " though human institutions appear to be, and, 
indeed, often are, the obvious and obtrusive causes 
of much mischief to society, they are in reality light 
and superficial in comparison with these deeper- 
seated causes of evil which result from the laws of 
nature and the passions of mankind." 

Yet even he makes this statement: "When the 
equality of property which had formerly prevailed in 
the Roman territory had been destroyed by degrees, 
and the land had fallen into the hands of a few great 
proprietors, the citizens, who were by this means 
successively deprived of the means of supporting 
themselves, would naturally have no resource to 
prevent them from starving but that of selling 
their labor to the rich, as in modern states ;" 
and then adds that they were cut off from even 
this resource by the enormous number of slaves 



lAND OWNEESHIP. 149 

which had been captured in the wars, and who did 
all the agricultural and mechanical labor. 

Macleod says : " Eome, which had not seen a 
foreign foe for seven centuries, was four times sacked 
by the barbarians in the fifth century. The free 
yeomen of the bright days of the republic had per- 
ished in the civil wars. The land was parceled out 
among a number of gigantic proprietors, and cul- 
tivated exclusively by slaves. Tillage had nearly 
ceased, and all the supplies came from the provinces. 
With the loss of these the supplies failed, and the 
population was reduced to the lowest deptJis of mis- 
ery.'' 

That it was the maladministration of the land which 
resulted in the enslavement and degradation of the 
people and the exhaustion and loss of fertility of the 
soil is too patent for serious discussion. But it may 
be well to notice that what Mebuhr and other late 
writers regard as a merit in the " agrarian law " con- 
stituted its main defect. It did not attempt to deal 
with all the land of the republic ; but only with that 
portion of which recent private appropriation had 
been made. If we had a history of the matter at all 
clear, it would doubtless appear that all private 
dominion of the land had arisen in Rome in the same 
way as that which the patricians had more recently 
obtained, from the sufferance of the state, over lands 
admitted to be public — a process similar to that 
which has been going on in our own country for a 
hundred years. A possible agrarian law was one 
which should have dealt with all land alike, and thus 
have prevented those dangerous accumulations in 
the hands of a few which gave power to the strong 



150 SOCIAL WEALTH. 

to defeat any effort whatsoever to protect tlie pos- 
sessions of the weak. The system of landed property 
in Eome is shown to have been much the same as 
that in other states, and was, doubtless, developed in 
a similar way. Their "households," " clan villages," 
and " cantons " corresponded in a general way with 
the households, villages, and manors of later times. 
The earliest authentic history of Rome gives us three 
classes : slaves, clients, and patricians, or house- 
holders. The first were property ; the second were 
persons, but without political rights ; the last were 
"the people." The slaves were, doubtless, captives 
taken in war, or their descendants ; the second class 
were probably aliens, who had come in as refugees, 
etc., but who seldom, under the Roman customs, ob- 
tained the privilege of citizenship. But all the 
burghers were on a footing of equality, and as land 
and political rights were inseparable, the original con- 
dition as between them must have been equal owner- 
ship. 

Speaking of a still earlier people than the Romans, 
Henry Sumner Maine says : " Whenever a corner 
is lifted up of the veil which hides from us the primi- 
tive condition of mankind, even such parts of it as we 
know to have been destined to civilization, there are 
two positions now very familiar to us which seem to 
be signally falsified by all we are permitted to see : 
All men are brothers, and all men are equal. The 
scene before us is rather that which the animal world 
presents to the mental eye of those who have the 
courage to bring home to themselves the facts an- 
swering to the memorable theory of natural selection. 
Each fierce little communit}^ is perpetually at war 



LAND OWNERSHIP. 151 

witli its neiglibor, tribe witli tribe, village with vil- 
lage. The never-ceasiug attacks of the strong on the 
weak end in the manner expressed by the monoto- 
nous formula which so often occurs in the pages of 
Thucydides : 'They put the men to the sword, the 
women and the children they sold into slavery.' Yet, 
even amid this cruelty and carnage, we find the germs 
of ideas which have spread over the world. There 
is still a place and a sense in which men are brothers 
and equals. The universal belligerency is the bel- 
ligerency of one total group, tribe, or village with 
another ; but in the interior of the groups the regi- 
men is not one of conflict and confusion, but, rather, 
of ultra legality. The men who composed the primi- 
tive communities believed themselves to be kinsmen 
in the most literal sense of the word ; and surpris- 
ing as it may seem, there are a multitude of indica- 
tions that in one stage of thought they must have 
regarded themselves as equals. When those primi- 
tive bodies first make their appearance as land- 
owners, as claiming an exclusive enjoyment in a 
definite area of land, not only do their shares of the 
soil appear to have been originally equal, but a num- 
ber of contrivances survive for preserving the equal- 
ity, of which the most frequent is the periodical 
redistribution of the tribal domain. . . . Gradually, 
and probably under the influence of a great variety 
of causes, the institution familiar to us, individual 
property in land, has arisen from the dissolution of 
the ancient co-ownership " (V. C, 225-227). 

Emile de Laveleye, in his " Primitive Pro^oerty," 
asserts as the conclusion of his thorough investiga- 
tion of the subject in all primitive societies all over 



162 SOCIAL WEALTH. 

the globe that " the soil was the joint property of 
the tribes, aud was subject to periodical redistribu- 
tion among all the families, so that all might live by 
their labor as nature has ordained. The comfort of 
each was thus proportioned to his energy and intel- 
ligence ; no one, at any rate, was destitute of the 
means of subsistence ; and inequality increasing from 
generation to generation was provided against . . . 
freedom, and, as a consequence, the ownership of an 
individual share of the common property to which 
the head of every family in the clan was equally en- 
titled were in the German village essential rights." 

The redistribution of the land was provided for in 
the sacred laws of the Hebrews, and its periodic 
return was hailed as a religious, as well as a social, 
festival. The land could " not be sold forever," at 
the most, for forty-nine years, as on the fiftieth came 
the national jubilee. Thus no Israelite could be 
wholly deprived of his heritage in the land, for each 
year brought him nearer to the restoration, and re- 
duced, by a definite amount, the sum necessary to 
redeem his patrimony, if he should obtain means, 
before the fiftieth year returned. In the same rela- 
tion the laws of Lycurgus and Solon may be regarded, 
since, economically, the abolition of debt must be in 
many respects equivalent to a redistribution of the 
land.* The aristocracy of Kome, therefore, must 



* According to Plutarcli, " the first of Solon's acts was that debts 
should be forgiven, and tliat no man for the future should take the body 
of his debtor for security. He valued himself for liaving liberated the 
mortgaged fields and the mortgaged citizens of Athens." 

Julius Caesar enacted what Tacitus calls "a wise aud salutary law," 



LAND OWNEESHIP. 153 

have regarded any agrarian law as directly leading to 
equal ownership in the soil, and without sufficient 
patriotism to esteem the public good above the in- 
terest of self or class, they waged against it a relent- 
less war, which sacrificed, in turn, the republic, the 
empire, and the Eoman civilization. 

Look at the question of private dominion of the 
land in whatever light we may, we can find it to 
originate in usurpation only, whether of the camp, 
the court, or the market. Whenever such dominion 
excludes or deprives a single human being of his 
equal opportunity, it is in violation, not only of the 
public right, and of the social duty, but of the very 
principle of law and morals upon which property it- 
self is based, which has been stated by John Locke 
to be this : " For his labor being the unquestionable 
property of the laborer, no man but he can have a 
right to what that is once joined to, at least where 
there is enough, and as good left in common for all 
others." A definition which will apply to the land 
as well as to mere commodities. 

It is clear, from the history of all people who have 
a history, that dominion of the land, in any other 
sense than that of common dominion, and a limited 
proprietorship, such as, in accordance with the above 
definition, leaves equal opportunity to all others, is 
incompatible with all principles of societary devel- 
opment, and could never have been understandingly 
sanctioned by any social consent, even did we not 
have the fullest testimony that it has been always 

compelling creditors to deduct from the principal of a debt whatever 
they had been paid m interest, but which his successors, at the behest? 
of Roman capitalism, utterly disregarded. 



154 SOCIAL WEALTH. 

accomplished by official betrayal of trusts, or by 
conversion of public duties into private rights, when 
not, as frequently has happened, by direct and forci- 
ble usurpation. To say that society can have estab- 
lished these usurpations, by positive enactment that 
they have obtained by prescription, or that individ- 
uals are estopped from pleading their just claim, is 
saying, in effect, that society may destroy itself — that 
it may enact that the principle of law on which prop- 
erty rests shall be obliterated in the name and in- 
terest of another kind of property, which is not 
property but robber3^ 

From the hasty review we have made, it seems 
equalW apparent that rent has originated in a wholly 
different way from that which economists assert; 
that it has arisen by converting the public tax for- 
merly levied upon the land into a private claim or 
debt due to one who has perverted the public rev- 
enue to his private use, and then claimed dominion 
of the land from whence it was derived. Surely 
Michael Davitt has grounds for his much-repre- 
hended saying, "Rent is an immoral tax." The right 
to tax is the highest prerogative of sovereignty, and 
may be logically questioned as to claim from any 
functionary of the state, or from the state itself, ex- 
cept as a voluntary tribute. How, then, can the 
right of its enforcement inhere in any private indi- 
vidual? How devoid of any justification is the 
employment of the powers of the state to enforce 
this usurpation, not in the public interest, but for 
private emolument! 



CHAPTEE X. 

PRIVATE PEOPERTY IN LAND. 

Private property in land, if sucli a thing consists 
with public right at all, mvist depend upon precisely 
the same principle as any other right of projoerty. 
As an element in human progress, the right of private 
property, in importance, has taken first and almost 
only place in the current systems of law and of polit- 
ical economy. While admitting its great importance, 
we cannot conceal the fact that the writers on those 
subjects have wholly failed to distinguish between 
its use and its abuse, or to recognize its rational and 
equitable limits. The nature of property, which is 
defined by economists to be " a bundle of rights," is 
now generally conceded to be " that of the individual 
to be protected by society in the quiet possession of 
that which his labor has produced." 

I quote Mr. Mill to the effect that the logic of 
property rights is "to assure to all persons what 
they have produced by their labor." This has been 
the reason on which all laws relating to property 
have been professedly based in all ages, however im- 
perfect or partially executed. 

We now inquire how these principles become 
applied to the land, which, as all admit, no labor 
had originally formed or produced. It is an easy 
thing to form a theory as to the first assumption of 



156 SOCIAL WEALTH. 

property in, or dominion over, the land, but the mis- 
chief wrought by theories of this kind is that the 
originator, instead of using it as a theory to help on a 
process of elucidation, immediately assumes it as a 
fact, and decides the problem solved, and all existing 
statutes and customs justified. Says Gibbon: "The 
original right of property can only be justified by the 
accident or merit of prioi^ occupancy. In the succes- 
sive states of society the hunter, the shepherd, the 
husbandman, may defend their possessions, by two 
reasons which forcibly apj^eal to the feelings of the 
human mind ; that whatever they enjoy is the fruit 
of their own industry ; and that every man who 
envies their felicity may purchase similar acquisi- 
tions by the exercise of similar diligence." He 
admits that " the common rights, the equal inheri- 
tance of maiikind," become usurjDed by the crafty 
and bold. " In the progress from primitive equity 
to final injustice, the steps are silent, the shades are 
almost imperceptible, and the absolute monopoly is 
guarded by positive laws and artificial reasons." It 
is unquestioned that monopol}^ as it exists, is di- 
rectly the reverse in its origin from that assumed 
as under the law of trade, and is derived from a 
system of ownership of which traces remain in every 
civilized country. 

Laws to protect and define separate ownership 
were made in the interests of equity, and were at 
first limitations to usurped dominion, rather than to 
protect and extend dominion by force, and so far as 
dictated by reason, were a restriction upon arbitrary 
will, and were developed by the gradual correction 



PRIVATE PROPERTY IN LAND. 157 

of the mistakes and evils flowing from misdirection 
and ignorance. 

As we Lave seen, all human exertion is resolvable 
into motion, or movement of things. The necessary 
relation between the mover and the moved is obvi- 
ously so close tnat there can be no room for any 
broad extension for either one without the other. 
There is also a definite proportion between the two 
— the power applied and the object effected ; the 
doer and the thing acted upon. The man, strong or 
weak, measures his strength against matter, and 
nature awards to his control just so much as he can 
move, and no more. If he essays to move a pound 
more than he is able, the force he does exert fails of 
all effect whatever. 

Now let us recall the generally admitted premise 
that all have an original claim to the ownership of 
the land. Take the individual alone with nature. 
How much land can he move in the direction of pro- 
duction — in other words, cultivate and improve? 
In his savage state he could roam over a consider- 
able area, and would require it to support his exist- 
ence by capturing wild game and gathering wild 
fruits. But as game grew scarce, nature would com- 
pel him to limit himself to a smaller area. Ultimately 
a very few acres would yield to him the greatest 
possible return for his effort, because proportion be- 
tween the force and the thing acted upon is one of 
the prime conditions of effectiveness in all spheres 
of production. This, then, is both the normal and 
the economic relation between man and the soil, and 
one which cannot be rightfully changed by any social 
compact, custom, or statute law. By combining his 



158 SOCIAL WEALTH. 

strengtli with others only can he accomplish more 
useful results ®r control a wider domain. 

As division of labor and increased effectiveness 
are attained through combination, a still less and 
less extent of control results proportionally. So 
greatly has the division of labor reduced this pro- 
portion that many otherwise intelligent people be- 
come unconscious that they need access to the earth 
at all. The progress of society in industry and com- 
merce tends to reduce constantly the necessary margin 
to individual controL The custom or statute, there- 
fore, which guarantees exclusive possession to a 
class, so extended that even the small amount re- 
quired by each person can only be obtained at a 
monopoly price, has no foundation in any reason, or 
principle of law of equity or economy. There can 
be no just extension of control to one person while 
another is deprived of all control. Besides, there 
can be no extension to the general control. The 
land of the whole globe is a fixed quantity, and so is 
that of every quarter — the domain of every nation, 
state, or township. When the whole people have no 
power to increase their domain, how can the indi- 
vidual have unlimited power of extension to his 
domain? Can society confer a power it does not 
itself possess? Individual possession of land re- 
quires to be defined and limited as certainly as are 
the boundaries of townships or states, and one man 
can no more rightly own the land upon which an- 
other lives than one state or nation can have juris- 
diction over its sister -state or nation. 

Ownership of land is sovereignty over the domain, 
and whoever owns the land upon which a people 



PEIVATE PKOPERTY IN LAND. 159 

live and toil is tlieir sovereign and ruler. When this 
dominion is subject to tlie commercial law, or law 
of the market, such sovereignty is merely that of 
trade, and the tribute or service becomes a royalty in 
the form of rent, interest, or dividend. Traffic in 
land, therefore, is nothing more and nothing less than a 
traffic in a kingly 2^'^^^rogative, and an extension of 
"the divine right to rule " the " earth and man " into 
the domain of trade ; and by which the victim of 
misrule gains nothing when he changes his nominal 
ruler from a " prince of the blood " to a president or 
governor, who like himself is subject to the "trade 
king."- 

In the evolution of civil law the right of private 
property prescribed limitations to the barbaric "law 
of the stronger." Its influence in civilization has been 
incalculable. Its own limitations have been slowly 
discovered and more tardily applied, until its abuses 
have become intolerable, and as obstructive of hu- 
man progress as was at any time the law of brute 
force, which it so largely modified. The dominion 
of property over man's person has but recently been 
abrogated ; its dominion over his heritage is yet su?- 
preme ; but when discovered to be what it is, a bald 
usurpation, it will naturally or violently disappear, 
as slavery and feudalism have done, through the 
evolution of industrial and social laws. 

The indefensible nature of traffic in the land, and 
its reduction to a commodity, subject to increase and 
engrossment, is tacitly admitted by the silence of 
the economists who assume its accordance with nat- 
ure. The principal writer who has taken up the 
pen on the conservative side of the land question 



160 SOCIAL WEALTH. 

scarcely makes a passable apology for the system. 
Mr. "W. H. Mallock, in his review of Messrs. George, 
Hyndmau, aud Marx, admits that to do away with 
rent might benefit the rent payer, as the release from 
any other debt might do. He seems to be unable to 
comprehend that the question has a wider scope, and 
that, as often ha23pens, the immediate rent payer 
makes a greater profit from a high rent, since it 
operates, to a certain extent, to shut out competition, 
the same as a license tax often affects a particular 
business. It is the social injustice which is to be 
deplored, and which sometimes travels far before it 
falls upon the unfortunate burden-bearer. 

He makes no effort to show how an honest debt 
can be formed by privilege to use the " common in- 
heritance," nor at all attempts to justify the mode in 
which the toiler has been robbed of his right to the 
land necessary to his support. He does not deny 
that the time may come when the land laws may 
require to be modified ; but satisfies himself with 
attacking what he regards as weak points in the 
statements and logic of the parties in review, and 
parries, as he best can, their arguments and reason- 
ings. He avoids altogether any discussion of the 
rise and growth of the system, or any inquiry what- 
ever into the origin of the titles under which land is 
held from the people. He will only entertain the 
fact that the present proprietor came to hold from 
another by purchase, and, therefore, is to be deemed 
honestly in possession of his land, since he paid his 
money for it. But, if we were to admit to be true 
what in large estates is notoriously untrue, even in 
this country, it could give no justification to the 



PEIVATE PROPERTY IN LAND. 161 

system, since to trace any title back will yield us 
nothing at last but one of forceful and fraudulent 
taking, even were land a proper subject of traffic at 
all. 

Mr. Mallock deprecates tlie agitation against land 
ownership, and though he acknowledges it may work 
evils and require to be modified, thinks a remedy 
like "nationalization of the land," or "limitation of 
estates in land," would be like prohibiting the sale 
of knives because they were sometimes used felo- 
niously to take life. But, in fact, the purpose for 
which dominion of the laud that others need is 
sought is to reduce labor to vassalage, ultimately to 
eject the laborer — murder him; first his man- 
hood, so as to bar to him all improvement from gen- 
eration to generation ; and then to destroy him. 
All this is not the showing of Messrs. George, Hynd- 
man, and Karl Marx ; but of W. H. Mallock in the 
very pages we are reviewing. In his arraignment of 
capitalism, he is almost without an equal. A position 
more damaging to it has seldom been taken by Radi- 
cal or Socialist. He even exceeds the fact, which is 
bad enough. He says : " What is progressive is not 
the faculties of the hireling laborers, but the 
knowledge of the men by whom labor is directed. 
The laborers begin exactly where their fathers be- 
gan. The directors of labor begin exactly where 
their fathers ended" (Property and Progress, p. 157). 

Now, although this statement is only generally 
true of farm and factory laborers, and largely false 
of mechanical and of nearly all other workers for 
wages who are capable of self-employment, it is due, 
unquestionably, to the extent that it is true, to the 



162 SOCIAL WEALTH. 

capitalistic system under wliicli " Property and Prog- 
ress " are discreted from " labor and arrested de- 
velopment," so far as it is possible, by cunning de- 
vice, to reverse the natural course of industry. 

But when Mr. Mallock comes to indorse the theory 
of Malthus, he makes what might have been regarded 
otherwise as a meek submission to the logic of events, 
an evident predetermination to obtain and hold do- 
minion of the land, not only that the future laborer 
might be rendered unable to begin where his father 
left off, but even to end as his father ended. It 
preaches to him a gospel of ejection and extinction, 
even before Malthus's dismal result shall be reached, 
and acquires and maintains ownership of the land, 
that this may be done the more effectually, so that 
his taking off may preclude and render unnecessary 
any unpleasant struggle he might make in the ulti- 
mate competitive selection. 

To be sure, he admits that " when the Duke of 
Westminster shows any desire to expel all the Bel- 
gravians, when the Duke of Bedford proposes to 
turn Covent Garden into a game-preserve, and when 
it comes to be the ambition of English landlords 
generally not to get their rents, but to get rid of their 
tenantry, then we may be certain that the English 
land laws will be altered " (p. 114). But in truth the 
power to eject, given by law to the landlord, is not 
merely a power capable of abuse, as the possession 
of a knife may be, but it is a power sought and given 
for this purpose alone, and which, no one knows bet- 
ter than Mr. Mallock, is not only freely exercised, 
without even the wretched excuse that they want to 
get their rents, by English and Irish and Scotch 



PEIVATE PROPERTY IN LAND. 163 

landlords, but by those of every country where land 
monopoly prevails. -They have the civil and military 
power of the nations at their disposal to do the mur- 
der of their bidding, and that without inquiring 
whether the landlords want their rent, or to estab- 
lish a rabbit warren, only they must not do it in a 
" general luay, you know ;" that would not be toler- 
ated, and so the whole system would tumble ! But 
while the knife is only used on those who are feeble 
and ignorant, and could not sustain the struggle for 
any length of time, any way, it is all folly to make 
such a noise about it. It only anticipates by a trifle 
of a thousand years, perhaps, the fulfilment of the 
prophecy of the " Gospel according to St. Malthus," 
and so, in any event, must be looked upon as the act 
of Providence, rather than of the "capitalistic land- 
lords and their servile instruments ! 

Coupled with the Malthusian theory of population, 
land monopoly resolves itself into an institution to 
predetermine the dismal issue without awaiting the 
struggle and actual trial of strength and endurance, 
so that the " unfittest," not the " fittest," may survive, 
and the fittest be destroyed. Because the desire to 
have the means of subsistence in the hands of capi- 
talists alone is one to give them an unequal advan- 
tage, and to bring on the issue long before any 
natural cause for it existed, if one is possible. 

Now, Malthus has made a theory from all the facts 
in the case, or he has falsified and ignored facts 
which, as many contend, show the contrary theory to 
be true, or he has built his theory upon partially as- 
certained premises, and to the neglect of tendencies 
and principles which counteract and render his the- 



164 SOCIAL WEALTH. 

ory improbable as to any specific culmination, but 
only in a general way proving tendencies to exist, 
wliicli, if uncomplemented by others, would produce 
the specific result, as gravity without centrifugal 
force could cause the earth to fall directly to the 
sun. I think the truth more likely, at least, to be 
found in the middle ground than at either extreme. 
But so far as this issue of the land is concerned, 
what essential difference can it make ? 

If Mr. George's position on this question is sound, 
then there can exist no justification for large control 
of the land, to be sure. If the mediate position, or 
any mediate position, be true, then Mr. Mallock, to 
justify landlordism, must prove that form of owner- 
ship is best calculated to delay and render less liable 
to occur the deplorable result, by inaugurating in- 
telligent and humanitary checks to population, and 
by refining and improving the race so as to render 
increase less rapid, and the catastrophe less disas- 
trous, if it cannot be wholly averted. He, however, 
does nothing of the kind ; but, on the contrary, ad- 
mits that the system we have intensifies and increases 
the tendencies against which every impulse of man- 
hood is aroused to resist or avert. 

But suppose the theory to be entirely faultless, and 
established as a matter ot natural science, what then 
is his position ? Why, that a few, at most a part of 
mankind, are justified in appropriating, not only the 
greater share of the products of* the labor of the 
toilers, but the land itself, the source of all suste- 
nance and the means to all productive labor, so as to 
jn'ecipitate the crisis, and deprive the disinherited 
of any means or ojDportunity to struggle for a sur- 



PEIVATE PROPERTY IN LAND. 165 

vival, in wliicli tliey would otherwise be sure to 
succeed against the effeminate and idle who are un- 
used to toil and privation. Few writers of an}^ school 
have so thoroughly unmasked the tendencies and 
purposes of modern capitalism as he. His criticisms 
of the "Statistics of Agitation" are inconclusive 
where they do not favor the opposite for which he 
offers them. If, as he contends, the condition of the 
poor is growing better, and the relative, if not pos- 
itive, condition of the rich is growing worse, what 
probability can there be of a near Malthusian epoch, 
j)ray? And if Mr. Hyndman and Karl Marx have 
played false with statistics and history to show that 
once the condition of the toiler was better than now, 
he cannot derive the cold comfort he seeks to draw 
from that consideration for the oppressed and disin- 
herited who reclaim a portion of their own, become 
more in earnest in obtaining other portions, and are 
not, as he imagines, disposed to rest content with 
what they have obtained, and to trust to conservative 
rule to give them more. 

In his showing that capital is the greater robber of 
the two, we think he has successfully proved that 
far greater amounts are taken from the industry of a 
country by interest and profits than by rent. In this 
he has an easy task, for this is Mr. George's weakest 
point — indeed, a blunder fatal to his whole" plan to 
remedy the evil. And still it may be true, as un- 
questionably it is, that the making a commodity of 
the land constitutes the basis of the capitalism of 
goods, which enables it to rear a superstructure over- 
shadowing its own foundation, the monopoly of the 
land. The surprising thing is that one should enter- 



166 SOCIAL WEALTH. 

tain tlie strauge notion that the destruction of land- 
monopoly would " increase the earnings [stealings] 
of capital," unless, indeed, the purpose were to con- 
fiscate the possession of one gigantic wrong in the 
interest of another, in the vain expectation that it 
will stand after the foundation is removed. 

The last point I can notice is that which Mr. 
Mallock takes in regard to "right to land." Though 
he admits it in a general way, in respect to the whole 
earth, he denies it in regard to any specific place or 
portion, and thinks the time likely to come when a 
number of citizens more would be born than could 
possibly live in a place, and " who not only had no 
inalienable right to live in it, but whom their fellow- 
citizens had an inalienable right to expel." He thence 
infers that some have a better right to land than 
others, and that institutions must determine which 
have better rights, and which none at all. But all 
this only leads over the road we have already sur- 
veyed, and betrays the animus of landlordism, which 
proposes to have the sure thing when the crisis 
arrives, and to not wait its coming, but keep the 
machine in running order by expelling and crowding 
out a few periodically. 

Indeed, I think some have a better right to land 
than others, viz. : those who render it productive 
and so remove, or at least postpone, the pressure of 
population upon the means of subsistence. But 
those are proverbially not the landlords, who, as a 
class, do the least, and often nothing, to promote 
production, unless paying their money to some one 
who has no exclusive title to the land, and taking 



i>EiVATE PROPERTY IN LAND. l67 

tlie rent as it becomes due, is reckoned to their 
credit. 

When a ship's company, through wreck or cir- 
cumstance of any kind, becomes reduced to neces- 
sity, every one is put on an " allowance," or, in ut- 
most extremity, lots are cast, and thus the struggle 
for survival is made an equitable one. A Hannibal 
or Csesar, in the forced march and severe privation, 
shared the lot of the common soldier. Not so with 
capitalism and a pseudo-aristocracy. That requires 
all such unpleasant episodes to be at the expense of 
the laborer, who has furnished the feast at which 
there are insufficient places, and whom the lordling 
and "money-bag" "have an inalienable right to 
expel," that they may partake in peace. Under- 
stand the crisis you have to meet, O workers ! and 
ask yourselves whether such issue to existing laws 
and customs, made by their ablest champion, renders 
them longer worth your submission and respect. 



CHAPTEE XL 

CAPITAL AND THE PEODUCTIVE FACTOES. 

What is capital, and what tlie things embraced 
therein, is a question so complete!}' mystified by the 
accredited writers on political economy that the 
word would not be employed but that it is generally 
used to signify accumulations of wealth or goods. 
The latest definition of it is " any economic quantity 
from which a profit is derived." 

But the distinction of chief importance is this, 
whether a thing in its nature is competent to give in- 
crease, or has such quality conferred by powers bor- 
rowed from other things, or by conventional customs 
and institutions. In its scientific aspect, this dis- 
tinction is of vital importance. What has power of 
increase in nature is readily determined. All organ- 
ized things have growth and the power of reproducing 
themselves. But no inert matters have any such 
power, and it is only through labt)r or the exertion 
of the human powers that they can have their utility 
or their exchangeable value increased. Of the or- 
ganic things which grow and multij^ly, none are 
available to man's use without the exercise of his 
powers in gathering and moving them. The farmer 
or horticulturist avIio cultivates berries in preference 
to gathering wild ones from the fields, does it be- 
cause it requires less labor to procure them of equal 



CAPITAL AND THE PRODUCTIVE EACTOES. 1C9 

quality that way than to gather the natural fruit, 
And so it is with all kinds of production. We would 
not adopt the artificial if it did not yield better, or. 
at least, equal compensation with the mere pursuit 
of garnering natural productions. On careful exam- 
ination, we shall also find that no thing in nature 
multiplies or increases without human care or atten- 
tion Avhich does not require the same sacrifice of 
time and effort to gather or capture as it would to 
produce kindred utilities by artificial means. 

The natural productions of the land, and the 
growth of wild animals, fowls, and other forms of 
animated nature which man appropriates for food or 
to furnish skins or fiber for clothing, are really em- 
braced in the simple term land, because they have 
no existence independent of it, and whoever controls 
the land appropriates them. 

In the earlier conceptions, which regarded capital 
as the stock or amount of money put to productive 
use, there w^as always a general acknowledgment 
that it promoted production, while at the same time 
it claimed to be stored labor, or product of labor. 

But business operations usually show, not a gain to 
capitals, hut a steady loss, and a loss which is only 
made good by constant accessions from the earnings 
of current labor. Of all those who go into business, 
but a small number come out with their capital un- 
impaired, after a reasonable compensation has been 
allowed for their services for the time engaged. 
That a few do more than this, some realizing large 
fortunes, gives currency to the conception that stock 
in trade is productive, and lends infatuation to the 
idea that money can be made in it, as a successful 



170 SOCIAL WEALTH. 

buyer of a lottery ticket thinks tliat lotteries pay. 
Of land and labor only it can be said with any de- 
gree of accuracy they yield an increase. And of 
them it can be said only when they are united, or 
the labor is applied upon the laud or upon material 
derived from the land. 

It would seem, then, that land and labor, instead 
of being excluded from the classification, should be 
regarded in economics as they are in nature, the 
ONLY CAPITAL. The mau who owns th»i land to the 
exclusion of labor can derive an income from it 
through the necessity of the excluded Avorker, who 
must obtain access to it by paying rent, or sell his 
labor for what the land holder will pay. 

It is possible, therefore, by dominion over these 
prime factors, to effect false and wholly artificial 
conditions which shall give increase to other things 
and other activities besides those of land and useful 
labor. The customs and laws which justify slavery 
place the laborer in the category of chattels, and his 
person among subjects of traffic. Property, of course, 
becomes productive then, especially if, as usually, the 
slaveholder be also a land holder. As the laborer 
becomes a merchantable commodity, and can be 
bought with money, he will impart to that money or 
other commodity for which he will exchange, a re- 
productive power. It may be mentioned as a fact, 
that in slave-countries the rate of interest, other 
things being equal, is always high. The rate in this 
country has fallen quite one-half since the abolition 
of slavery in scarcely more than a score of years. 
Other circumstances have contributed to the same 



CAPITAL AND THE PEODUCTIVE FACTORS. 171 

end, doubtless, but that lias been one of tlie main 
causes. 

If tlie land be reduced to the condition of a com- 
modity, and made a thing to be trafficked in, the 
money or goods for which it will exchange will have 
imparted to it the same power of increase which 
attaches to the land, and will have conferred upon it 
the same royalty or power to tax the production of 
labor. In nature land and labor are always capital, 
and never commodities ; and the products of these are 
always commodities, and never capital, except through 
subversion of normal relations, and by the reduction 
of capital to the category of products, thereby dis- 
persing a portion of its productive power, to sustain 
a false factor in its relation. The truth of this, how- 
ever, aside from the interest of the capitalistic advo- 
cate to disguise it, is lost sight of from the fact that 
most persons, using commodities in the production 
of other commodities and in rendering service, as 
merchants with their goods, and carriers with their 
teams or other means of transportation, join with it 
their personal and also hired service, and usually 
calculate these earnings of labor as proft on their capital. 

When the farmer joins his labor to the land he 
has bought with money, and employs hireling labor 
mainly to do the work, he regards the profits upon 
the labor and his entire earnings, and perhaps of his 
family also, as so much gain, to be credited to the 
profit on the money paid for the land, for wages and 
necessary means to prosecute his business. 

The increase which has resulted from the union of 
land and labor is shared by the money lord, while 
the land and the labor receive between them the 



172 SOCIAL WEALTH. 

moiety their necessities demand. Even the rent 
goes, not to the land, but to the landlord as a capital- 
ist whose money is invested in the land. 

The failure of Mr. George to discover this led 
him to treat of the monopoly of land and of capital 
as two separate things, not merely distinct from, but 
as antagonistic to, each other ; the one as the friend, 
and the other as the enemy of labor. Overlooking 
the fact that land is reduced to a commodity and so 
brought under the reign of capitalism, and that 
" private property in land," is simply one of its 
means of subjecting labor, the principal one since 
chattelism is abolished, he concludes that there is 
an inverse tendency between the operation of land- 
lordism and capitalism, and between the rates of rent 
and of interest. Nothing could be farther from the 
truth. Interest and -rent are not rates, but things to 
which rate applies. The rede per cent, of rent and 
the rate per cent, of interest so nearly correspond that 
they may be said to be the same, and from any tem- 
porary aberration tend constantly to return to equi- 
librium. The " pure economists " find no difficulty in 
conceiving land and labor both to be capital. I quote . 
" The land itself on which a city is built is wealth ; 
the owners of it obtain a great revenue by simply al- 
lowing other people to build houses upon it" (Macleod, 
E. E. 76). " Labor itself is a valuable commodity ; 
it has value, just as that of a material chattel ; it is, 
therefore, an exchange " (lb., 128). He goes on to 
instance copj^rights, patents, etc., funds, shares, ad- 
vowson, etc., and triumphantly asks the previous 
school " how these are the production, distribution, 
and consumption of wealth." 



CAPITAL AND THE PEODUCTIVE FACTORS. 173 

To show the absurdity of treating these last-named 
things as " elements of a physical science," it could 
be suggested to him that they are mostly the creat- 
ures of statute and prescription. Advowson in par- 
ticular is a feature peculiar to the union of church 
and state, and which would necessarily disappear 
with the disestablishment of the church. He could 
also have extended his list. A " letter of marque," a 
license to keep a liquor saloon, a brothel, a gambling 
hell, or a " fence " for stolen goods, might obtain for 
its owner a large " revenue by simply allowing other 
people " to work under them. An appointment or 
election to public office, which capitalists or corpora- 
tions may desire to influence so as to divert public 
interests to private use, may obtain for its owner also 
an appreciable sum, and it is therefore wealth and a 
portion of his capital and a scientific quantity ! To 
such results we are driven the moment we attempt to 
place the natural sources of wealth in the same cate- 
gory with conferred privilege and usurped powers. 

That when capitals or properties are created by 
law and sanctioned by use, trade economists should 
treat them as economic quantities cannot well be 
avoided, perhaps , but that they should be instanced 
as demonstration of scientific principles is too ab- 
surd for serious treatment. We might not prevent 
the pretended naturalist, who had never seen horses 
but with blankets or trappings on them, or terrier 
dogs but with docked tails and cropped ears, from 
classifying them under heads determined by these 
distinctions ; but we need not allow him to confuse 
our minds with the notion that the blanket is a part 
of the horse, or that the terrier's ears and tail are 



174 SOCIAL WEALTH. 

sliortened by a " natural instigation." As little 
should we be misled by the constant treatment by 
economists of the most artificial and arbitrary rela- 
tions of industry to trade as though they were the 
scientific exponents of natural conditions under natu- 
ral law. 

The subject of the natural means and factors of 
production forms the principal stumbling-block in 
the reasonings of reformers as well as of economists. 
Although nothing is more common among them than 
the phrase, " Labor produces all wealth," yet the 
Socialist, as well as the capitalist, will immediately 
begin to talk about " the means of production ;" the 
one to show that capital acts a part in production, 
and should therefore share in its results, and the 
other to show that machinery, tools, etc., as well as 
the land, should be taken possession of by the state, 
and production be carried on for the benefit of all. 
As usual, the truth lies between the extremes, cer- 
tainly not, as here, where they meet. Land aiid 
labor being the natural, improduced capital, should 
have no artificial barriers placed between them. 
Land, being a natural, not a produced thing, has no 
exchangeable quality, and can not rightfully be held 
against the demands of the needy. It is the basis of 
life and action. With labor it is productive ; but it 
is the only thing which is productive. The goods of 
the wealthy, to which their title is undisputed, is 
that alone which is the result of labor. Now, if ma- 
chinery, tools, general plant, etc., are really means 
of production in the sense of contributing of them- 
selves to production, then a very curious question 
arises between the capitalist and the Socialist. Either 



CAPITAL AND THE PKODUCTIVE FACTORS. 175 

the capitalist must surrender wliat his labor has 
earned, directly by his individual application, and 
indirectly by the natural production of the goods, 
tools, etc., to the state to be distributed promis- 
cuously, by a ratio of need, not of deed ; or else the 
Socialist must abandon all hope and purpose of im- 
proving the condition of those who do the labor of 
the world. Between these two diametrically antag- 
onistic claims there seems to me to be but one point 
where reconciliation is possible. That is by the 
elimination of land from the category of things pur- 
chasable by labor, because not producible by labor, 
and a return to the natural right of labor to reap the 
fruits of its own application. If this should leave 
the question unsettled as to whether goods and tools 
produced goods and tools, it would leave it in a fair 
way of settlement. At least it would no longer allow 
the capitalist to add to the earnings of his own labor, 
and of his goods and tools, the natural produce of 
the land, and so deprive other labor of its natural 
opportunity and reward. The Socialist should con- 
sider, also, upon what ground he makes the claim 
that capital ought to release its control of machinery 
and plant in the interests of society. If they are 
really productive, why should the owner be required 
to surrender their earnings ? If they are not produc- 
tive, but, on the contrary, require to have their wear 
and tear and natural decay constantly replaced by 
labor, and are only made to appear productive by 
their false relation with a really productive element, 
the land, then indeed his protest against such capi- 
talistic use is reasonable and just ; but, in that case, 
it by no means needs that the state should take the 



176 SOCIAL WEALTH. 

plant from the owners ; it only needs that it should 
cease to guard the false relation, and by opening to 
the enjoyment of labor its only productive comple- 
ment — the land. In the one case, he would make a 
rational demand, which no casuistry can deny ; in 
the other, the inconsistent requirement that success- 
ful workers shall be deprived of the natural fruits of 
their labor, and of the peaceful enjoyment of what is 
a natural growth of those fruits. 

Nor is the dilemma of the capitalist less embar- 
rassing. If he takes the position that his plant is 
productive, and that his wealth truly represents the 
production of his labor, and the auxiliary earnings 
of such production, and that the condition of the 
poor and improvident is really the result of natural 
law, still he cannot deny the right of society to protect 
and support the poor, who are destitute of productive 
means to help themselves. And thus escaping the 
Scylla of " social democracy," he will fall into the 
Charybdis of " govermental distribution of burdens," 
the Communism of the state. But when capitalism 
will yield, or shall be shorn of its usurped dominion 
over the land, to which it can produce no shadow of 
natural or justifiable title, it may confidently aj^peal 
to the sense of justice in mankind to protect it in the * 
possession of all those things to which a labor title 
can be shown. 

But the assumption of the capitalist and the Social- 
ist in regard to the productive power of labor pro- 
ducts is without the least foundation in fact. There 
is only an accumulation of products ; no such thing as 
production begetting production. It is true that 
machinery, plant, and stock, which are only the pro- 



ACTIVE FACTOR IN PRODUCTION. 177 

duction of labor, are consumed in new productions ; 
but that is only because tliere is demand for the new 
production rather tlian the old. The consumption of 
these to produce the new creates a new demand for 
the application of labor to their reproduction, and so 
the circle is constantly repeating itself. The cost of 
tools is always the labor necessary to produce or re- 
produce them. Their use in production is only such 
labor as is saved by it to the series of productions in 
which they are employed and consumed. In any in- 
dustrial or economic sense, means of production are 
limited to labor and the raiv material. 

ACTIVE FACTOR IN PRODUCTION. 

T^e dominating factor in production is human labor. 
Man, the worker, is the active and moving force in all 
social industry or development. He is so constituted as 
to require a supply of material food and also constant 
activity. The muscle that does not find its appro- 
priate nourishment withers or wastes away ; but so 
also does the muscle that ceases to be used. And. 
this is correspondingly true in respect to every phys- 
ical or mental power of the man. Nature herein in- 
dicates, with a directness not to be mistaken, that 
human loants are to he supplied, and by human activities. 
No reasoning seems required upon a point so plain ; 
and yet so fertile is false education and idle igno- 
rance, that whole classes are taught to believe that 
all industry is a curse and a disgrace, and that to be 
usefully active is to forfeit respectable social posi- 
tion. This is true to a great extent of the children, 
especially the daughters, of the rich, in the fashion- 



178 SOCIAL WEALTH. 

able world, no matter bow the riclies upon wliicli 
they pride themselves may have beeu accumulated 
by their immediate or remote ancestors ; whether by 
severe application and intense activity in laborious 
and vulgar avocations, or by methods now deemed 
predatory and criminal. And thus the mind of the 
thoughtless becomes inflated with the idea that to 
leave one-half of the man, his activity, without use 
ennobles and distinguishes him. 

To the enlightened mind, on the contrary, to appro- 
priate the goods of life without serving is the most 
childish and ignoble of all things. To desire a con- 
dition for self or offspring, such as will relieve from 
the necessity of exercising the activities of our nat- 
ure, is to desire deterioration and effeminacy. We 
shall see, at length, that it is only under misdirection 
and the usurpation of the elements essen'jial to hu- 
man life and happiness, by a few, that slothful ease 
appears preferable to that depth of deprivation to 
which such usurpation dooms the worker, whose ex- 
cessive labor dwarfs his mind, while it fails to supply 
the required nutriment to sustain his body in health.* 

Activity is the normal condition of all the human 
faculties. Man needs no following with a lash to induce 

" Since wherever a mouth and a back are created a pair of hands 
also is provided, the inference is unavoidable that the hands are to be 
used to supply the needs of the mouth and the back. Now, as there is 
one mouth to each pair of hands, and each mouth must be filled, it fol- 
lows, quite naturally, that if a single pair of hands refuse to do its work, 
then the mouth goes hungry or, wlmt is worse, the work is done by 
other hands. In the one case the supply failing, an inconvenience is 
suffered and the man dies; in the other case, he cats and wears the 
earnest of another man's work, and so inflicts a wrong " (Thoughts on 
Labor : Theodore Parker). 



ACTIVE FACTOR IN PRODtJCTlOl?. 179 

liim to work. Labor only becomes irksome and re- 
pulsive when a few by shirking their share can throw 
burdensome proportions upon others, or when, ex- 
cluded from the laboratory which nature has provided 
him, the laborer has to beg the privilege to toil from 
his fellow, who slanders their common nature by as- 
suming that it is laziness, and not a sense of injustice 
and despair, which makes hireling labor distasteful. 
As the very nature of the two factors in industry 
requires their equal proportion to each other, so ex- 
ercise of the functions of production and assimila- 
tion retain a definite ratio to one another. In igno- 
rance of these laws, the child whose need of food is 
first felt becomes liable, through mere habit, to 
develop his appetite more rapidly than his love of 
motion. Such become gluttonous and indolent, or 
intemperate ; but usually the attraction " to do " is 
early manifested, and it is often more difficult to 
suppress this tendency than any other, or to govern 
it without directing it into the channel of some use- 
ful industry. The terrible ennui with which all idle 
people, however cultured, are afflicted, is but an ear- 
nest remonstrance of our nature against the depart- 
ure from her economics. Correlative to this are 
the results at the other extreme, where overaction 
and insufficient or unsuited nutriment develops the 
muscular at the expense of the mental forces. Cult- 
ure, refinement, and manly intellection are impossi- 
ble to the many in such condition ; and yet the law 
of compensation often asserts itself by retaining in 
the over-tasked and toil-hardened frame a generous 
and cheerful disposition and inflexible integrity, 



180 SOCIAL WEALTH. 

nature thus testifying, even in extreme subjection, to 
the nobility of man and the dignity of work. 

The facts so familiar to the commonest observa- 
tion show that the love of active life, the zest of 
beholding things grow under our hand, whether in 
the fields of agriculture, with trees and fruits and 
flowers, or with the mechanical constructions or 
artistic forms, furnishes abundant inotive and in- 
ducement, without lash or bribe, to prompt the man 
to attainment in every aim of life. 

A great motive to industry and to the investigation 
of the law of its development lies in the love of off- 
spring. This alone is able, with birds and animals, 
to secure the most patient and protracted toih As 
related to remoter posterity in man, it becomes iden- 
tified with the greatest social problems. It prompts 
the man to labor, and to conserve the products of 
industry. The labors thus induced serve first to 
supply his own wants, and then to add to the goods 
preserved to society, in order that the circumstances 
of his children, and his children's children, may be 
improved. Thus also will he serve, under equitable 
rule, the future general society, and gratify that 
higher love for man which looks beyond the mere 
ties of relationship or nationality, or even of time. 

That societj^ of which this working agent is a tem- 
porary member, has progressed through what may be 
termed Natural Selection, there can be no doubt. 
Whatever we may accept or deny as to theories re- 
specting man's origin or descent, we cannot ignore 
the varying characters of men and of peoples, as well 
as of species in the animal and vegetable worlds. 

But the limit of natural selection seems to be 



ACTIVE FACTOR IN PRODUCTION. 181 

reached as regards man wlien the race has suffi- 
ciently advanced to admit of a more integral devel- 
opment, so that the multiplication of the species may 
be kept within requisite limits by intelligent selec- 
tion, if indeed any tendency to over-population ex- 
ists, of which there appears a very reasonable doubt. 
War and the destruction of the weak by the strong 
serve, then, no purpose now, but retard social evo- 
lution. Industry need no longer be enslaved, but by 
liberation and wise organization may become attract- 
ive, so as no longer to need force or fraud to utilize 
its activities. 

Another consideration indicates the limit of the 
principle. In the lower species natural and, indeed, 
the most careful, intelligent selection only develops 
special qualities. Thus, great speed in the horse is 
wholly incompatbile with great strength for draft. 
So, by the rule of force and destructive competition, 
we may produce a class or warriors and of slaves, of 
capitalists and of hirelings, but never a well-devel- 
oped man. 

To effect this an integral system of education and 
of industry is required, and the outworn antago- 
nisms and hazards, which propel ever to extremes, 
must be dropped out of our social life and reciprocity 
take its place. It is a favorite apothegm of the schools 
that man is ever the same, and that since he has al- 
ways been swayed by love of gain, he always will be. 
But nothing is more certain than the progressive 
change which constantly, though gradually, takes 
place in his purposes and pursuits. The forced la- 
bors of the past become the sports of the present. 
The wager of battle and forfeit of life and goods is 



182 SOCIAL WEALTH. 

changed to competitive games and harmless pas- 
times, and the desperate struggle for existence is 
turned to mutual help and reciprocal exchange. If, 
indeed, the old barbarity has sheltered itself in the 
more recent forms of trade, it has been under dis- 
guise until found by experience of its results to be i 
what it really is, or has had its vail removed by its 
own votaries, who can devise no other available de- 
fense for it, and hence urge its antiquity. 

A learned professor of one of our most popular 
universities avers that we must have " the survival 
of the fittest or of the ?wifittest;" and this would fol- 
low as a logical conclusion if we admitted his as- 
sumed premises, that one must destroy tlie other. But 
if history has any meaning, however, the only neces- 
sity, if it now exists, is found i7i the blind stupidity 
and brute-like passion which it is the business of 
social science to enlighten and of social organization 
to control, so that both the fit and the unfit may sur- 
vive, and each be benefited far more than either 
could possibly be by the destruction of the other. 

If, however, it should appear in any case that one 
could improve his own condition by destroying the 
other, that is a contingency which calls for the pro- 
tection of society, which to save itself must guard its 
weakest member.^ Superior physical strength and 
business tact are not the only requisites to social 
service, and whatever the individual may think or de- 
sire, society cannot afford to deprive itself of the ser- 
vice of a Homer or a Milton, a Poj^e or a Byron, be- 
cause of physical defects, or of a Goldsmith or a 
Burns because they could not drive an advantageous 
bargain. The rudest social economy must embrace 



ACTIVE FACTOE IN PRODUCTION. 183 

tlie utilizing of the less as well as of the more per- 
fect. The agriculturist who should rely upon natu- 
ral selection, instead of intelligent selection, would 
have an abundant growth of weeds, brush, parasites, 
insects and vermin, but a " beggarly account " of 
fruits, grains, and of domestic fowls and animals. The 
great champions of the doctrine of natural selection, 
Spencer and Tyndall, have each, if I mistake not, 
been upheld by the assistance of others, and of gov- 
ernment, in their struggle to place before mankind 
great philosophical and scientific truths. Can they 
give any good reason wh}^ the faithful worker in any 
field should be "let alone" in his struggle for life, 
while building for society, any more than themselves ? 
Not only the institution which boasts the possession 
of a Sumner among its faculty, but every institution of 
its kind in our country is endowed by public or private 
beneficence, and could not survive a day if it should be 
withdrawn. It cannot fail to be seen how appro- 
priate is the teaching of " laissez-fcdre " by the pro- 
fessors and scholars produced by institutions sup- 
ported and upheld by the very opposite practice. 
That such institutions do not encourage any investi- 
gation of the industrial problem is not to be won- 
dered at. How can they discuss the interest and 
rent questions when their very existence depends uj)on 
the annual tribute capitalized funds and lands en- 
able them to lay upon labor ? The perpetual bribe 
of which they are thus the recipients is too weighty 
to be overborne by the wail of suffering toil or the 
appeal of the honest thinker. They can scarce desire 
the promulgation of a truth which would disestablish 
their institutions. As little can they desire the sur- 



184 SOCIAL WEALTH. 

vival of the fittest since tliey are liolding up an insti- 
tution which would fall of itself, and are being held 
up themselves by a system of capitalism dependent 
wholly upon laws and customs established and main- 
tained to thwart equal opportunity and to prevent 
freedom of competition and of exchange. 

The reception which a patient investigation of the 
subject is likely to meet can be readily imagined 
when we consider that the object sought in introduc- 
ing the question of survival into the labor discussion 
is to justify a system which denies equal opportunity 
for the very purpose of relieving favorites from the 
operation of the law of competition they laud. It is 
capitalism, not industry, which is ever devising sine- 
cures and exemptions from any struggle whatever. 
As an instance, a noted millionaire has lately set- 
tled upon his son, who failed, not in a struggle to live 
by honest labor, but in a contest as a Wall-street 
" gambler," five thousand dollars a month. Profes- 
sor Sumner may be right as regards those who are 
spared the " struggle for existence " by annuities 
and unearned incomes. Doubtless we have in their 
cases the survival of the unfittest. 

With equal opportunity and access to the natural 
elements, a healthful struggle would result, Avhich, if 
it did not involve the destruction of some by others, 
would secure the survival of the industrious and 
frugal, and correct the proclivities of the idle and 
predatory. Our present system of division is scarcely 
more than a plan for sustaining luxurious paupers. 

The assumption of a necessity for the ignoble and 
destructive strife in industry and trade will not 
endure the slightest investigation. The Malthusian 



ACTIVE FACTOR IN PRODUCTION. 185 

theory is tlie only logical one in regard to it, and 
that has been shown to be groundless by Mr. George 
and others. In truth, as he has shown, the more 
society is advanced in numbers, intelligence, and in- 
dustry, the farther it is removed from any danger of 
pressing on the means of subsistence. It is in 
sparsely settled and savage countries that famines 
occur, or in populous states, as in Ireland and India, 
where the people are miserably misgoverned or over- 
governed. When the white inhabitants of this con- 
tinent were numbered by thousands, the different 
nationalities were in constant war with the red men 
and with each other, and the struggle was deemed 
essential to the safety and success of each, as well as 
to establish the fittest survival. But now, with nearly 
a hundred millions, life is better sustained and wars 
are few, arising now from lack of statesmanship, or a 
yielding to narrow prejudice, rather than from any 
natural tendency or civil or economic necessity. 
The active agent or factor is not one involved in the 
problems of over-population, or in the life and death 
struggle. He is a member of society, the social unit. 
The development to extremes begets dissolution, and 
the societ}^ which does this must perish. Science 
points to a development through union, under nat- 
ural equity and justice, in which industry and econ- 
omy shall crown the victor with the laurels which 
peace and plenty afford, and encourage, not destroy, 
the less successful. 

Of one thing, however, we need to take note. The 
worker is an ever-changing person. Individual men 
come and go ; the race remains forever. The rela- 
tion, therefore, of the worker to the soil or object 



186 SOCIAL WEALTH. 

wrought upon, is transient and passing. It was said 
by the great Hebrew lawgiver, as from the omnipotent 
Worker : " The land is mine, and ye are sojourners 
with me." "The land shall not be sold forever." 
The sojourner can control no longer than he staj^s. 
This dominion over the land ends with his occu- 
pancy. His only ownership is an " occupying 
ownership."* 

PASSIVE FACTOR IN PRODUCTION. 

The great fountain-head from which the material 
elements in production are derived is the land. The 
matter of the earth is so disposed by nature, and the 
elements of fertility so deposited, as to render culti- 
vation a pleasant and compensating employment. 
In the passive factor is embraced all raw material, 
or that which has not been affected by human activ- 
ities. The natural productions are really a part of 
the earth, and must be considered as such in any 
economic discussion. The earth forms the founda- 
tion of all industry of the man, and is the point 
where his activity meets and co-operates with the 
heat, the light, the air, and the moisture, indispens- 
able to production and to all life. Only upon the 
land has he any means of contact with them, and 
otherwise can have no stable existence. An allot- 
ment of land, then, as separate property, or as a 
common right with others, is a first requisite in re- 



* This term is used by Mr. Wallace to signify the method of land- 
holding under " Land Nationalization." It expresses, however, the 
natural law of ownership more nearly than any term heretofore 
employed. 



PASSIVE FACTOR IN PEODUCTION. 187 

ducing industry to any intelligible problem. Not 
only must the land exist, but its relation to the 
worker must be defined ere a single step can be taken 
in subjecting industrial production to any system. 
Science absolutely refuses to attempt any solution 
of the industrial question until this is determined; 
for otherwise it can assign no sphere to labor, no 
field for the exercise of man's activity. There may 
exist spontaneous productions of nature, without 
man and his labor ; but without the earth no indus- 
trial production can exist ; the labor, and even the 
man himself, disappears. 

In the very statement of the industrial factors, 
then, we encounter a positive institution, which for- 
ever bars any system of industry which can be re- 
duced to scientific terms, because it confounds all 
terms and agencies which could help to a solution. 

If land and labor are the factors, and. the only 
factors, in production, it follows necessarily that 
there must be freedom from any and all arbitrary 
control over them, such as may prevent the access of 
the one to the other, commensurate with the re- 
quired action. Any other control of the soil than 
that of the cultivating occupant can but fetter and 
cripple labor and retard production. The freedom, 
of man without freedom of the land can benefit 
neither. Science can no more accept the system of 
exclusive land tenure, and endeavor to reconcile in- 
dustrial life with that, and to build a system of eco- 
nomics upon it, than it can accept the mythologies, 
theologies, astrologies, and alchemies which have 
been, or may now prevail, with which the intellec- 
tual minds of the past employed themselves in the 



188 SOCIAL WEALTH. 

absence of any scientific method of arriving at trutli. 
Any system established under nescience must sub- 
mit to the crucial test of scientific examination. 
Science cannot become its apologist and special 
pleader. 

Exclusive dominion of land divorces the natural 
factors, and as to its whole extent bars productive 
industry. An axiom so plain requires no argument. 
Its results are seen in extended private domain, poorly 
and but partially cultivated even in the most popu- 
lous districts. The people dispossessed of their inheri- 
tance crowd to the cities, where vast accumulations 
of absorbed wealth invite to employment, sometimes 
useful but often hurtful to the man, 1o social well 
being, and precarious to the unskilled or improvi- 
dent. The fertile properties of the soil are wasted, 
and so cannot be returned to maintain its productive 
capacity. 

This country has an extensive domain of fertile 
soil. A considerable portion of its people live yet in 
independent homes, but through our system of unre- 
stricted ownership, and the accumulative power of 
capitalism, the land is being absorbed rapidly in few 
hands, with results always unfriendly to industry and 
the well-being of those who toil. This barrier be- 
tween the factors prevents labor from finding em- 
ployment and the land from being improved. To re- 
move this barrier is not the business of science, but 
merely to point out the consequence of the institu- 
tion, and the effect of the natural freedom of these 
agents. Remedies are not within its province. Only 
political and legislative quacks will seek to redress 
by statutory enactment and positive institution the 



PASSIVE FACTOR IN PRODUCTION. 189 

wrongs which arise mainly from a deprivation of lib- 
erty such enactments have caused and which only 
liberty can correct. 

It may be proper to notice here what the leader in 
the modern school of economics, Mr. Macleod, calls 
the " third source of wealth," and, if such existed, he 
could be relied upon to find it. He says (E. E., 164) : 
" Eights are created by the mere fiat of the human 
will . . . and extinguished equally by the fiat of the 
human will. But these rights may be bought and 
sold or exchanged; their value may he measured in 
money ; they form the most colossal commerce in 
modern times ; we have valuable products created out 
of the absolute nothing by the vaeTeJiat of the human 
will and decimated mto nothing. There is a third 
source of wealth besides the earth and the human 
mind — the human will." In the above extract we 
have the truth fully shown, which we have endeavored 
to make plain elsewhere, that these " private rights," 
which " form the colossal fortunes of the times," are 
the mere creatures of arbitrary Avill. As a conse- 
quence they do not create social wealth, but consti- 
tute merely a means of appropriating social wealth to 
private uses, " out of the absolute nothing " so far as 
any return of service to society is concerned, and 
"decreated into nothing" when society looks for its 
plundered stores. 

But while they are in being they can " be bought 
and sold and their value measured in money." And 
so might human beings or anj^thing whatever which 
the law made property. But whoever wants to pur- 
chase these rights after they have been created 
from nothing, will find that he has at least to give 



190 SOCIAL WEALTH. 

somefhing in exchiinii^G for tliem which is veritable and 
which his will alone will not reproduce without hard 
labor. And when these values are decreated into 
nothing, as in the case of declining shares and bonds 
and of periodic bankruptcies, they are usually found 
in the hands of those other than favorites of the fiat. 

But with the leading thought of the paragraph, the 
" third source of wealth," we have yet to deal. I have 
sought in vain, through the popular Avriters, for any 
evidence that there was " a third source of wealth," 
besides " the earth and the man," including all its 
forces and opportunities and all his power, mental 
and physical. But I have found it at last in what 
Mr. Macleod calls the " human wilL" But since the 
human will is but one of the elements of the human 
mind, " emotion, intellect, will," I can just as readily 
find five as three. To what ridiculous shifts does 
this professor of economic prestidigitation resort to 
cheat the worker out of his labor-title to the wealth 
he has created ! Whether it be through manual or 
mental toil, the emotion, the intellect, and the will 
are all employed in every form of work and are part 
of the worker's self. I have yet to find a " third 
source " or factor of social wealth. 

Mr. George, although repeatedly stating that the 
factors in production are " dual, not tripartite," con- 
tinually treats capital as a third factor, though par- 
tially disclaiming such purpose by asserting that 
" labor and capital are but different forms of the same 
thing — human exertion," and that the " use of caj^i- 
tal in production is, therefore, but a mode of labor." 
Undoubtedly there must be, as he says, " a point at, 
or, rather, about which the rate of interest" to this 



PASSIVE FACTOR IN PRODUCTION. 191 

particular mode or labor " must tend to settle, since 
unless such an equilibrium were effected, labor would 
not accept the use of capital, or capital would not be 
placed at the disposal of labor." But he makes no 
attempt to show what this point of equilibrium is, 
nor does he seem to apprehend that, under freedom 
of the soil and opportunity to labor, it would vary 
from what capital is now enabled to extort, through 
its power to monopolize the land. 

The natural point of equilibrium unquestionably is 
zero, since one side of an equation minus the other 
side equals 0. The capital, which is labor, stored up 
in matter, as he says, must necessarily balance with 
equal amounts of the same thing stored in muscle, 
and if circumstances fayored one mode at one time, it 
must vibrate by natural law of supply and demand as 
far to the other side, the point of rest being nought. 

His confusion of thought upon this point is inex- 
plicable. He says ^' the reward of capital and the 
reward of labor will be equal, that is to say, will give 
an equally attractive result for the exertion or sacri- 
fice involved." What can he mean? Who makes 
jthe exertion or sacrifice — the capital or the capitalist ? 
'If the capitalist, then for such exertion or sacrifice 
his share is in proportion to that which the other, 
labor, has contributed of exertion or sacrifice. If he 
means that the capital has made the sacrifice or ex- 
ertion, then he makes it not a, passive but an active 
agent. No wonder he thinks it impossible to formu- 
late the thing " as wages are habitually estimated in 
quantity and interest in a ratio." Had he said that 
this ratio was a duplicate one, while wages were pro- 
portioned by " equal difference," the utter dishonesty 



192 SOCIAL WEALTH. 

of this capitalistic formula would have been betrayed. 
After all his special plea for capital, he at last, how- 
ever, falls back upon the ground that interest is di- 
rectly connected with " the law of rent," although mis- 
takenly holding that ** as rent arises, interest will fall 
as wages fall." And yet he concludes (chapter v. 
Book 3d) by reiterating that there are only two fac- 
tors which "by their union produce all wealth."* 

Mr. Clark, in his " Higher Law of Property," 
blindly follows George in his deference to the ex- 
ploded " rent theory," and also in his subjection to 
the capitalistic superstition. Saying that land, or the 
" bounty of nature," is " the primary source of all 
wealth," he continues : " The next source of wealth 
is labor. Man applies labor to land— to the bounty 
of nature — and procures food, clothing, shelter .... 
Then after a while he preserves some of his acquisi- 
tion to aid him in acquiring others. As soon as he 
reaches this point, a third factor enters into produc- 
tion — capital. The man has wealth in store ; he is a 
capitalist." 

" Land, labor, capital. These three things under- 
lie all wealth and all exchanges of it." That is to 
say, land, labor, and wealth underlie all wealth and 
its exchanges,! for he uses wealth and capital as 
synonymous in the immediate context. Mr. George 
was too shrewd to be caught in this logicsX faux loas, 



* Asserting clearly this principle, he yet seeks to tax away tlie in- 
crease which is due to land and labor alone, and divide it between capital 
and labor. 

fTliis is as accurate as it would be to say: "The land, foundation, 
and houses underlie all houses." 



PASSIVE FACTOR IN PRODUCTION. 193 

and Mr. Macleod avoids it altogether, though falling 
into a still more ridiculous error to maintain the 
same point, by taking up one element of the human 
mind as a thing distinguishable from the mind it- 
self. But the utter vacuity of common sense is reached 
when Mr. Clark, blindly following his economic 
leader, intimates that the land owners of the nations 
" harvest all their own immediate profits and ulti- 
mately the profits of capital and labor besides." 

We shall be unable to find, search we never so care- 
fully, any reason given for a third source or factor in 
production which will bear the least scrutiny. Mac- 
leod wrote for the express purpose of proving that 
labor was only one of a great variety of causes which 
create wealth ; Mr. George to show that both capital 
and labor were equally wronged by " private property 
in land," and Mr. Clark, to show that capitalism and 
even landlordism may be allowed their present sway 
if his two per cent, tax be imposed. Surely one of 
these would have hit upon the " third source " if such 
existed, or such notion were capable of an intelligible 
statement. 



CHAPTER XII. 

PARTNEESHIP AND CO-OPERATION. 

A NOTICEABLE feature attending the production of 
any wealth (I use the term in its industrial, not its 
trade sense) is that it is always social. Whether it 
proceeds by hireling or slave-labor, or by a more in- 
telligent co-operation, there is, in acquiring any 
goods whatever, necessarily a combination of effort. 
Now, since labor and the land are inseparable in any 
industrial or economic problem, and since "the earth 
is the natural inheritance of mankind," it follows 
that the joining of labor to land in all production 
requiring more than one man is a partnership. It 
must also follow that all production under such com- 
bination of effort is the property of the partners so 
engaged. 

" While any particular establishment belongs to 
the proprietors, yet so long as labor (present) and 
capital (past labor) are equally essential, any par- 
ticular business considered in the aggregate is as 
much that of those who bring to it the labor as of 
those who furnish the money. If laborers withdraw 
from it, it comes to an end as certainly as when the 
proprietor closes his doors " (Justice T. M. Cooley 
in A^. A. Beview of Dec, 1884). 

Distinctive industries, as well as individuals, are 
mutually dependent on each other, and intelligent 



PAETNEE8HIP AND CO-OPEEATION. 195 

co-operation or reciprocation is really the life of so- 
ciety. In most industries, moreover, a large number 
of persons must work together in concert. No doubt 
such co-operation constitutes in its essential features 
a partnership. I can enter into no detailed account 
of the law of partnership, my purpose being merely 
to show that it is a principle of social industry, and 
was derived from the early community of interest in 
the early village society. That it was so derived, 
and is really a relic of the primitive organization, is 
sufficiently apparent in the simple characteristics 
the law has preserved through all the changes in 
civil and political institutions. 

So far as the members of any partnership in the 
especial business in which they engage are con- 
cerned, it is a community of rights and of goods, 
features wherein it may vary from this being the 
result of positive enactment or special agreement. 
These variations aflfect partnerships, more especially, 
which are entered into for mere purposes of trade or 
speculation, the widest departure being made in 
regard to joint-stock companies, which make mem- 
bership, if such it can be called, a matter of bargain 
and sale in the transfer of shares. This cannot be 
done in an ordinary partnership, otherwise the cap- 
italistic privilege would cease to remain such, change 
only being allowed by the retirement of one or more, 
and the admission of another or others. In this 
respect co-operation, as it has been developed in 
England, and to a smaller extent in this country, 
CQii-responds to the principle of partnership, since it 
guards in some degree against stock-jobbing, which 
has proved so pernicious in our railroad companies 



196 SOCIAL WEALTH. 

and other joint-stock corporations. In these latter 
we have another instance of the exemption of cap- 
italism from burdens and the triumph of " the 
market," which seeks the deduction of all things to 
its control, and to make them matters of sale and 
purchase. But for this corporate monopolies would 
by no means develop the dangerous powers they do. 
Without it the corporators would be more amenable 
to public law and could be held in some degree re- 
sponsible for their acts. 

Where two or more are engaged in any productive 
labor, they necessaril}^ become partners. It would 
by no means require that anything more should be 
agreed to than simply that they work together in the 
procurement of some goods. Both in law and equity 
they would be partners and entitled to share in di- 
vision, proportionally to the work done. In the ab- 
sence of other contract or special agreement, no other 
conclusion could be drawn. Our laws, however, re- 
garding property, and which, untler the domination 
of capitalism, are made without any direct reference 
to labor, in defining partnerships, joint-stock com- 
panies, and co-operative societies, ignore labor as an 
element in production, or, rather, in the division, and 
make each 2^<"^i'tner's or stockholder's share of the 
dividend to depend upon the amount of money or 
other value invested. But the silence of the civil law 
in regard to labor does not make the claim of labor 
any the less valid. It simply throws it back upon 
the natural law and equity of the thing. It would 
probably be claimed that the labor performed womld 
be recognized as so much stock contributed, or as so 
much labor hired or purchased ; and doubtless this 



PAETNERSHIf AND CO-OPEEATlON. 197 

must be so. And doubtless, also, it is for this reason 
that the wages paid the laborer are assumed as &full 
settlement of the laborer's claim. 

The necessity of co-operation in any field of indus- 
trial enterprise is too apparent to require proof. The 
very demand for labor is sufficient. If a man could 
do everything by himself, he would seek no helpers. 
Now, helpers are necessarily copartners in produc- 
tion, and, therefore, on the dying out of slavery, which 
was logically sustained only on the ground of con- 
tract, the wage system was adopted to give a fairer 
semblance to the older fiction and device for appro- 
priating the partner's shares to individual use by the 
stronger and dominating member of the industrial 
firm or partnership. 

The effect of wages was to modify the nature of 
such partnership in this way. The laborer was sup- 
posed to sell his membership in the firm, from day to 
day or month to month, as the captive before had 
been assumed to have bartered his for life, and even 
that of his children and posterity under slavery. 
Deprived of land, and therefore of opportunity to em- 
ploy himself, he had no alternative but to thus, like 
Esau, sell his labor right. It was not even necessary 
to let him know that he had one to sell ; but since it 
was there, by this false reasoning it could be demon- 
strated to him at any time that he had contracted it 
away, if ever his blunted intellect should awaken. 
There were also some compensations which appealed 
to his dislike of intellectual exertion and of incurring 
personal responsibility in large undertakings. The 
wages, also, however small, were usually paid down 
or at short intervals, so that he would not have to 



198 SOCIAL WEALTH. 

wait the slow process of production before he could 
enjoy its fruits. This is doubtless one reason why 
industrial co-operative enterprises have usually failed 
of success. The wages system, moreover, has its at- 
tractions, for as long as wages are good and employ 
constant, the worker acquiesces in the system till an 
industrial crisis overtakes him and he is thrown out 
of employment or has his wages greatly reduced. It 
is then that he becomes the victim of vain regrets 
and despair at his hard lot, and harbors thoughts of 
retaliation against those, perhaps, who are no more to 
blame for this condition of things than himself. He 
only sees his employer or the company who have had 
the direct benefit of his labor, but not the operation of 
those subtle influences which warp exchange, finance, 
and production itself to the aggrandizement of a few 
and the robbery of the many. 

When it is said that all who engage in production 
are partners, it is not intended by any means to ap- 
ply it alone to those who are engaged in a special 
branch or handicraft. Every step from the gathering 
of the natural production to the completion of the 
commodity and offering for consumption is co-opera- 
tive ; the service of the merchant and the retailer as 
well as the cultivator and doer of mechanical services. 
The principle of equity applies, therefore, to the rule 
of division and the awards to services as well as to the 
settlement of accounts. It is for this reason that 
wages and profits afford no scientific solution, since, 
though they may be made matters of contract, they 
proceed by incompatible methods and irreconcilable 
ratios. The one is computed by rate and time. The 
other by rate per cent, repeated at intervals, which 



PARTNERSHIP AND CO-OPERATION. 199 

produces a progressive ratio. Where this amounts 
to no more than a reasonable compensation for ser- 
vice, the injustice of the method does not develop it- 
self ; but when large values are transferred, the 
profits become added to the amount and thus multi- 
ply constantly. The wage-worker can only add his 
daily net earnings when anything remains over ex- 
penses. This does not increase his wages as the in- 
•crease of the dealer's stock increases his profits. 

Profits, as far as they compensate service, do not, 
however, like pure interest and pure rent, stand 
wholly dislocated from any economic or social rela- 
tion. A large majority of those who rely on profits 
for their compensation do not receive more than an 
equitable share of the general production as compen- 
sation for the service they render the society they 
serve. It is only the few who, by use of large means 
and favoring circumstance, or, perhaps, by legalized 
monopolies, which enable them to operate without 
competition, are able to double their means, period- 
ically, instead of adding to them, one by one, as at 
best the wage- worker is only able to do. 

The true merchant apprehends that it is real 
service for which he is entitled to remuneration. 
The false merchant works for profits, and is not a 
co-operator in the social industry, but a despoiler 
and tribute gatherer. His position to industry and 
social life is antagonistic. He appears never as a 
co-operator and helper. The division he seeks is 
not equitable or friendly, but oppressive and dis- 
honest. 

It will be objected, I foresee, that the progress of 
production would be greatly retarded, even if ulti- 



200 SOCIAL WEALTH. 

mate success were possible, in making every worker 
in an establishment a partner, and to have a voice in 
the management of the affairs of the co-partnership. 
But I am not advocating any special plan of opera- 
tion, only stating Avliat are the actual facts in the 
case, viz.: that the co-workers are co- partners. 
Whether our civilization is sufficiently advanced to 
make practical the recognition of this truth is an- 
other and quite different question. And whether 
the wage-worker himself may not prove the greatest 
obstacle to an equitable system of industry and di- 
vision is also one difficult at this stage to be deter- 
mined. It is only when all the facts in any given 
problem are known that there becomes a possibility 
of its proper solution. When it is once received as 
a scientific proposition that ownership of the product 
of one's labor inheres in the laborer, whether that 
labor be single-handed or whether it be exerted in 
unison with another, or with a thousand others, some 
means of giving it proper recognition will not be 
wanting, and there is no need to embarrass a scien- 
tific inquiry by the bugbear of impracticability. It 
is of the utmost importance to any exact solution of 
the problem of labor, and its equitable award, that 
we divest ourselves of all those prejudices and super- 
stitions in regard to property and the sacredness of 
contracts in which capitalism has entrenched itself, 
making itself, and not labor, appear as the giver of 
work and the creator of wealth. At this point labor 
must take its stand without compromise, or else 
surrender at discretion. For if by joining his labor 
with another, or others, the worker loses his title to 
his product, then the operator is under no obligation 



CO-OPERATION. 201 

to give him anything more than the competition 
wages, and these realized, he has nothing further to 
claim ; and when they cease he has no right to com- 
plain. If the factors and the elements belong to the 
capitalist, of course the results also belong to him. 
He has purchased both the labor and raw material 
in the market, and turned them into goods, and they 
are his. The labor reformer who yields here, ac- 
knowledging that capital has productive power, or 
that the factors in production, land and labor, are 
marketable commodities, kicks the ladder from under 
him on which he is attempting to ascend, and makes 
his position logically absurd. It is true the worker 
may exchange his share of the product after the di- 
vision is made, or agree beforehand upon the division, 
and so accept a payment in the form of wages ; but 
to give such transaction a show of equity, he must 
be at liberty to employ himself, because, if he be 
denied his natural opportunity to labor, free access 
to the soil, he contracts under duress, and the pay- 
ment of such wages does not conclude him. It is 
not a free, but a compulsory exchange. His claim 
for settlement still remains good to his share of the 
product of the partnership work, less what has been 
paid him, and it is the difference between such share and 
such payment lohich constitutes the profits and accumula- 
tions of CAPITALISM. 

CO-OPERATION. 

The word which seems to stand readiest in the 
mouth of the unstudious and unreflecting well-wisher 
to the poor and toiling, is co-operation. This, it is 
thought, can work in some wonderful way to rectify 



202 SOCIAL WEALTH. 

the usurpations of power, tlie weakness of igno- 
rance, and the indolence and tliriftlessness of the im- 
provident. If, however, a little careful tliought is 
exercised in obtaining an understanding of what co- 
operation really is, and what it is not, much needless, 
not to say extravagant, speculation would be avoided. 
The word means simply " working together," and is 
usually, though not necessarily, contrasted with com- 
petition. 

In its industrial application, it embraces the whole 
field of the division of labor and of combination of 
effort, and has, in this respect, accomjDlished all which 
can be accomplished in the sphere of production 
while the great inequalities of division remain. Some 
neophytes in social studies imagine they have discov- 
ered in it the great specific for the misfortunes of 
labor, and think they see in its mighty productive 
power the means of righting all wrongs and over- 
whelming all injustice. They do not consider that 
every factory, every bonanza farm, every enterprise in 
which numbers are engaged and functions are special- 
ized, is a truly co-operative proceeding. Even the 
slave plantation is such with its thousaurl slaves. 
The trouble is that these are forced, not voluntary, co- 
operations, and that this co-operation does not ex- 
tend to the division of the products of this industr3^ 
While this defect remains, it does not matter how 
much the association of labor and capital and the 
division of labor may increase production; the dis- 
proportionate compensation will continue. Propor- 
tionals, added to or subtracted from each other, 
remain proportionals still. To increase the product- 
iveness of labor does not necessarily increase the 



CO-OPERATION. 203 

share whicli falls to the laborer, unless equitably 
divided and exchanged. 

The advocates of simple co-operation have gene- 
rally accepted the capitalistic claim for profits and 
dividends to capital, apparently ignorant that it is in 
these exactions that the whole burden falling upon 
labor has its origin. Such co-operation is a mere 
change of form, which may give relief to one class by 
shifting the burden to another, already staggering 
under a too heavy load. To make our large corpo- 
rations and industrial enterprises, as they exist to- 
day, truly co-operative, it is only necessary to stop 
the leakage due to rent, interest, and profits, and in- 
fuse a modicum of honesty into the system of divid- 
ing the products resulting from the labors of the 
co-operators by striking an equation between services 
and compensations. All the elements are at hand in 
the account-books of any concern in the land. And 
any accountant can make the proper balances if he be 
allowed to do so, by throwing out false entries and 
fraudulent footings. 

It is therefore idle to hope for more favorable re- 
sults from association simply. Division of labor 
and combination of efi'ort are already carried to ex- 
tremes in our industrial systems. In it specializa- 
tions of functions are carried to an extent which 
makes mere automatons of the operatives. It 
dwarfs the body and the mind, and leaves only one 
faculty of mind or one set of muscles active. Such 
rerl notion of the man to the exigencies of large pro- 
duction is wholly unnecessary. With any equitable 
system of division, which would secure the applica- 
tion of the activities of all, a few hours' application to 



204 SOCIAL WEALTH. 

one line of production would suffice each day to pro- 
duce the comforts of life for each, and there would l)e 
left to all many hours of each day for healthful recrea- 
tion and intellectual improvement. 



CHAPTEK XIII. 

Law of conteacts. 

The relation of this subject to the problems we are 
considering may at first sight appear remote, yet we 
shall see it has very important bearings upon the 
question as to whether the worker has forfeited his 
right to a living portion of the common earth, or 
whether he has surrendered his natural claim of 
ownership over that which his labor has created. 

We have seen how contract followed the first stages 
of advancement from the veriest savage state, where 
the life of the subjected family or tribe was forfeited 
to the victor, in giving the successful warrior the 
right to the lifelong service of the victim so spared, 
and how such contract or interpretation of it crept 
into our civil code under the equivocal words of our 
national Constitution of " person held to service or 
labor," and " claim of the party to whom such service 
or labor may be due." It is not merely that con- 
tracts have their origin in the way shown, but it is 
difficult to see how they can exist in respect to debt 
on a more humane and fraternal method. For no 
sooner are the creditor's rights acknowledged in any 
legal sense than it becomes illogical to offer any 
modification or limit thereto. To give him the right 
to exact the payment of the debt is not of the least 
consequence, unless it confers the power to seize the 

203 



206 . SOCIAL WEALTH. 

goods of the debtor. And if the debtor has no goods, 
or conceals them, the creditor is still powerless to 
effect collection, unless he is also empowered to 
exact the debtor's services. Now, he can only obtain 
control of the debtor's services by obtaining posses- 
sion of his jjerson. To control the person, however, 
involves dominion over such person's life. And in 
primitive times the debtor, when a husband and 
father, involved also his wife, his children, and his 
slaves, they following him into slavery and becoming 
subject to the absolute disposal of the creditor. The 
laws of Moses had many features which ameliorated 
this condition in some important respects, as by the 
return of the seventh year all debts were canceled. 
The poor Israelite could only be sold to another 
Israelite " who had substance." And he was to be 
treated as a hired, not as a bond servant, and was to 
be set free at the return of the year of jubilee 
(Lev. XXV., 37). But all these constituted no adjust- 
ment of rights between the creditor and debtor ; they 
were logically an invasion or annulment of the rights 
of the creditor, which, if they have any logical basis 
whatever, are not to be thus limited and set aside. 

In Greece and in Rome the creditor had power 
over the person of the debtor. The remedy which 
Solon applied to the desperate state of things he 
found in Athens was really the abolition of the 
creditor's power. The struggle between the patri- 
cians and plebeians of Rome centered around the 
attempt to limit the rights of the creditor. To such 
extremes was this right carried that a creditor could 
not only sell the defaulting debtor into slavery, with 
his family, but the letter of the law permitted, where 



LAW OF CONTEACTS. 207 

there were several creditors, that the debtor should 
be cut in pieces and shared between them. It is 
claimed that in this respect the Komans were found 
better than their laws. During the period of feudal- 
ism the person was not attachable for debt, but on 
its decay, and on the establishment of mercantile 
communities in Europe, it was revived, ostensibly in 
the interest of commerce. As late as 1830 over seven 
thousand debtors had been imprisoned in London 
alone during a single year. In this country the abo- 
lition of imprisonment for debt is a late thing in 
most of the older states. In most countries some of 
its features still remain. In Turkey the debtor is 
the virtual slave of the creditor, and he is held for a 
gambling debt the same as for any other. This is 
also true in Mexico and in other states on this conti- 
nent and in Europe. In our own country, to remedy 
the operation of bankrupt laws and exemption of 
the person and property from seizure, there are in 
most states certain lien laws which operate to 
strengthen the power of the creditor over the debtor. 
These vary widely in different states, accordingly as 
the tendency is to favor the worker or the trader. 
Those calculated to favor labor are generally decided 
to be unconstitutional by the courts, while those 
which favor the trader are generally enforced. 

I quote from the testimony of Mr. Atkinson before 
the Senatorial committee to investigate the causes of 
the exodus of labor from the South a few years ago. 
He refers that movement to tlie oppressions the 
colored people had experienced from the operation 
of the " system of credits granted by shoplteepers 
under the lien laws of Georgia, South Carolina, and 



208 SOCIAL WEALTH. 

North Carolina," similar laws existing in Louisiana 
and Mississippi : " This system of liens is for tlie se- 
curing of advances to the small cultivators, to enable 
them to plant and raise their crops, for which ad- 
vances very heavy rates of interest are charged, and 
to compensate for the risk thus taken by the persons 
making the advances very exorbitant prices for the 
supplies furnished are also charged. . . . Advances 
used to be made by the land owners to their laborers, 
but are now mostly made by what are known as cross- 
road storekeepers. I was informed by persons who 
seemed to have positive knowledge in the matter 
that the difference between the cash price of the 
goods and the price at which they were advanced 
under the liens ranged from fifty to one hundred and 
twenty-five per cent., and that those who sold at an 
advance of from fifty to seventy -five per. cent, consid- 
ered themselves very honest dealers, and that they 
were doing favors to those with whom they were 
dealing." 

The consequence of such a system of contracts so 
enforced can be readily imagined ; constantly increas- 
ing dependence and poverty on the part of the work- 
ers, and which can hardly benefit the land owners or 
shopkeepers themselves. That a few workers may, 
by extraordinary industry and saving, or favored by 
exceptional circumstances, even emerge from this 
state of helplessness is possible ; but any general im- 
provement or amelioration under such conditions is 
simply impossible. If in person tlie}^ are not liable 
to seizure, yet the product of their labor is subject to 
a lien, first for rent, and secondly for everything they 
have used or consumed in cultivating or managing 



LAW OF CONTRACTS. " 209 

their allotment of land. Denied access to the inherit- 
ance bestowed on them by nature, they have no re- 
source but to submit to the terms of the land owner 
in the first place, and no means or opportunity to 
provide themselves with tools, seeds, manures, etc., ex- 
cept by mortgaging the future crop. Under such 
circumstances how can they make a contract which 
can justly bind them or which society can properly 
enforce ? As they are excluded from their rightful 
patrimony, they can make no valid contract as to 
their labors upon that which is of right their own or 
as to the product such labors may yield. 

The subject itself is such as to preclude a rational 
contract. That the man works the land precludes 
another's claim to it by the natural law of use ; for, 
though it might appear in certain cases that if he did 
not work the land the pretended owner would or might 
do so, the reverse is generally true ; rented land is 
usually what the legal holder does not and cannot 
use. As the right to use a thing depends upon its 
rightful ownership, and the right of ownership is de- 
rived from labor, a man to obtain the benefit or use 
of goods or lands must use them in person. This is 
the natural law of use. Only partners in creating 
can rightly be sharers in using. When the occupier 
of a house has paid in any form its full cost, such 
house in equity belongs to him, not to the person 
whom he has paid for it ; and when the cultivator of 
a farm has paid the cost of the improvements upon 
it, the farm belongs to him and not to the one he has 
paid.* 

* The right of use is an inseparable adjunct of the duty to use ; it ex- 
ists in potency only where the -power to use exists, as the right to life 



210 SOCIAL WEALTH. 

The same principle applies to all forms of wealtli 
as well as to the land and its improvements. If one 
does not wish to use his money, food, clothing, or any 
goods himself, he can only exchange them for some- 
thing else, which he does desire to use, or thinks he 
may desire more sometime in the future than the thing 
he parts with. When the exchange takes place the right 
of use is exchanged, and of course is canceled on 
each side. To give to one party the use of both things is 
no exchange. And to loan or hire out such use is a 
fraud perpetrated against nature and man. It is an 
attempt to exercise the right of use without the per- 
formance of the duty to use. Certainly society can- 
not justly recognize contracts which bind the party 
using anything to give the benefit of such use to him 
who declines to use. 

But the denial of the right to share the benefits of 
use to those who do not use does not prevent any 
just claim they may have to the thing itself. That a 
contract may be binding, it is necessary not only 
that no deception be practiced, but that no advantage 
be taken of one of the contracting parties, in conse- 
quence of his ignorance of some fact in the knowledge 
of the other, which would have prevented him from 
entering into the contract, if he had known it. So- 
ciety cannot in equity enforce any contract tinged 
with fraud, misrepresentation, or where it has been 
entered into by a party under misapprehension of 



exists only i n the living ; and all the advantages of a given use belong 
to the DOER of it. A man may tiike helps or partners to perform a use, 
but cannot farm out or sell any duty or use that God made Ms. Neither 
the moral law nor any man's duty under it can be changed by human 
volitions, or agreements, or mandates. — I. H. Hunt. 



LAW OF CONTRACTS. 211 

facts within the knowledge of the other, but with- 
held. To make a contract valid, so as to warrant the 
interference of arbitration in its enforcement, it must 
be entered into by those competent to make it. A 
minor cannot contract, even under our laws. A per- 
son under duress cannot. A contract which is 
entered into to regain possession of what is wrong- 
fully withheld from one cannot be enforced by the 
one who did the wrong. It has been decided that 
the partner cannot deal with a partner for his share 
of a business without putting him in possession of 
all the information which he himself has with respect 
to the state of their affairs. Advantage cannot be 
taken of the imbecility of a party, or of one who has 
been induced to intoxication to forward an agree- 
ment. 

All contracts which involve the alienation of a man's 
natural rights, or those of his children, are excluded, 
for reasons obvious to the most stolid. It is no con- 
tract, and, as we have already shown, no exchange. 
As to the compensation of the laborer, wages is no 
settlement of his claims, and there is not one of the 
circumstances present which would justify society 
in assuming that the wage-contract, whatever it may 
be, is a contract which debars the laborer in the in- 
dustrial partnership from claiming his equitable 
share in the joint production. And in respect to 
debt contracts, they are not entitled to regard except 
as matters of trust, as where one confides the keep- 
ing of his goods or funds to another, or of an incom- 
pleted exchange, where the transaction has been 
fulfilled upon one side, but not upon the other. If 
there are risks run in such attempts at exchange, we 



212 SOCIAL WEALTH. 

may assume, in the absence of any proof to the con- 
trar}^ that in the transfer on the one side, and prom- 
ised transfer upon the other, this risk has been 
adjusted at the expense of the party who is respon- 
sible for it. But if it involves a payment for delayinpj 
transfer by the one part}^ other than the reasonable 
risk, it involves a principle of usurance for the loan 
of the money necessary to discharge the obligation, 
and is no more binding than any other obligation 
given without consideration. For no consideration 
can be shown, unless the circulating medium con- 
sisted of " ducats " ivhich breed, or of notes which 
themselves bear interest*, as some of our " war meas- 
ure " money actually did. The wisdom of having 
society or government interfere in any way with the 
exchanges of individuals may well be questioned. 
Usually the exchanges are completed. It is a 
matter of choice with one who has a commodity 
to dispose of, whether he will have cash or barter, 
or whether he will part with it upon some one's 
promise to pay him at a certain time. If he does 
this voluntarily, what has society to do with it? 
But the man may refuse to pay him when the pay- 
ment becomes due ! True ; but this is one of the 
contingencies of the transaction. While laws for the 
collection of debts are in force, certainly he can in- 
voke their aid, and plead with show of justice that 
the fact of their existence on the statute book was 
one of the encouragements, if not inducements, to 
give the credit. But when that law is repealed, he 
has no such plea to make and cannot justly throw 
the burden of his mistake, in dealing, upon the pub- 
lic. But even while such laws remain, it is not nee- 



LAW OF CONTRACTS. 213 

essary tliat society should enforce the payment of 
interest. To repeal all such laws prospectively 
could do no wrong to anyone. There has been a 
long and loud clamor against the " usury laws," from 
the days of Jeremy Bentham to the present time, 
but without a single intimation from any writer of 
repute of the logical complement to their abolition, 
viz. : the withdrawing of the subject wholly from the 
operation of law ; letting people make such agree- 
ments in regard to it as they please, and fulfil them 
as they please, the same as matters of gaming and 
other things outside of law. Society can have no 
interest in promoting the practice of usury any more 
than that of gaming. Its operation is wholly to di- 
vert the social wealth and the products of all indus- 
try from the true owners into the hands of private 
parties, whose increase is at the expense of the gen- 
eral good. It may, nevertheless, be a wise action to 
forego the legislation by which it has tried so fruit- 
lessly for so many centuries to abate the evil, if, at 
the same time, it will wash its hands of the vice by 
ceasing to enforce it. 

We can anticipate, of course, the interest its apolo- 
gists will express in the poor land owner, who would 
not in that case be able to borrow money or obtain 
the means to do any business or save himself from 
want. I remember the same cry when imprisonment 
for debt was abolished. All this is very pathetic, but 
is only a false scent thrown out to cover injustice. It 
is paying interest and getting in debt which has made 
one hundred poor for every one it has aided to im- 
prove his condition. The credit which depends 
upon the power to coerce payment of interest upon 



214 SOCIAL WEALTH. 

it bad better not exist. All necessary and ^^seful 
exchanges can be made without such laws or such 
credit. 

It has often been proposed to make the payment 
of interest apply as payment of a debt by installments, 
and to recognize no other contract as to its payment. 
In fact, in the absence of statute laws, this would be 
the natural disposition of the subject. Lycurgus. 
Solon, and Julius Caesar established such laws, and 
their conduct has been approved by the thinking 
minds of all ages. And what is now required is not 
the establishment of a law, but the disestablishment of 
one which is the remnant of the barbaric law that 
gave the creditor the power of life and death over liis 
debtor, and over his wife and children. How much less 
barbaric is the law which now allows the creditor to 
place a lien upon the husbandman's crop, or lift the 
roof from the cot of the Scottish crofter, and turn 
him homeless with his family from the domain on 
which his forefathers have lived for a thousand years, 
to make place for a cattle range, a sheep farm, or deer 
park ? Any enforced collection of an interest-bear- 
ing debt means all this and more. In its broader 
application to communities and states, where the 
power to borrow is quite certain to be abused, it 
means the bombardment of cities, the butchery of 
citizens, and the imposition of unworthy rulers and 
obnoxious forms of government, as illustrated many 
times in the present generation, notably in Mexico 
and Egypt. 

Relying upon the law of force and the well-known 
proclivity of monarchical rulers to do the bidding of 
capital, the public functionaries of a country are 



LAW OF CONTRACTS. 215 

tempted or bribed by financial sharpers to run largely 
in debt, and when the people rebel against the out- 
rageous taxes levied to meet the interest, that country 
is invaded and reduced to subjection by all the 
"means available to civilization." Such is the log- 
ical sequence to the debt and credit contract upheld 
by force. 



CHAPTEK XIV. 

MONEY AND CREDIT. 

The references to these subjects are not intended 
as specific investigations, but relative only to the 
more primal matters of production and of exchange, 
to the latter of which they are mere instruments. 

Tha value inherent in money, as where some valu- 
able commodity is employed for a medium and stand- 
ard, is only important as a means of security in incom- 
pleted exchanges or to make good a balance remaining 
due to one party to a transaction. Otherwise, anything 
whatever may be used as a tally, like notches cut in 
a stick, or pebbles thrown in a pile, or figures placed 
in a book, as agreed upon between the parties. A 
current tally must, of course, have behind it a gen- 
eral or " common consent," or it would fail to be cur- 
rent. To such public tally or currency there will be 
necessarily attached, if not inherent, a guaranteed 
value equal, or assumed to be mutually equal, to the 
things exchanged, as two values are proved to be 
equal to each other by demonstrating their mutual 
equality to a third. If, however, the exchange is a com- 
plete one, it will make no difference how valuable or 
how worthless the currency may be in which it is 
merel}" calculated. A man selling a horse for one 
hundred dollars and taking two colts at fifty dollars 
each in payment, has no concern as to the money it 



MONEY AND CREDIT. 217 

is calculated in. An exchange, in fact, is never com- 
pleted until the commodities exchanged are received 
on both sides. When a man parts with his services 
or the commodity in which his service are enfolded 
for a certain amount of currency, he does not part 
with them for the currency in itself, but for other 
commodities which he needs to support life or pro- 
mote his enjoyment which that amount of currency 
is supposed to command when and as he may desire 
them. And the same is true whether the currency 
has intrinsic value, as in gold and silver, or merely 
guaranteed value, as in promises to pay. It is now 
seen why a stable value in the currency is requisite 
to anything like an equitable system of exchange 
where delay occurs in the completion. During the 
civil war the greenback, the currency supplied to 
the people, was subject to daily and hourly fluctua- 
tions, sometimes reaching as high as twenty-five per 
cent, in a single day, and varying altogether from par 
to one hundred and eighty per cent, discount meas- 
ured by gold, which itself was at one time at four or 
five per cent, discount in silver, which again, in its 
ability to purchase labor or stable goods, was also 
subject to a wide fluctuation. 

Of course, exchanges were altogether a matter of 
hazard under this state of the currency, and the most 
careful dealer could not tell when he was selling a 
thing at a supposed advance whether next day he 
would be able to replace it for the money he had re- 
ceived, and was only assured of his gain or loss after 
he had repurchased. 

The man who has stored a few silver or paper dol- 
lars depends upon the " common consent " of all 



218 SOCIAL WEALTH. 

with whom he anticipates dealing to receive them, 
whether paper or coin, at same value as he received 
them, and when this is assured to him it is a matter 
of indifference whether the dollars have actual value 
or only its guaranty. In either case he can put the 
currency to no use, unless, indeed, he wishes to put 
the silver to some industrial purpose, when he would 
really buy of himself the bullion contained in the 
dollars. The greenbacks would serve no purpose for 
food, or clothing, or shelter, unless turned into beef, 
bread, etc., furnished by actual labor. So that no ex- 
change is complete until both sides to the transac- 
tion are " satisfied." " Money itself is only a higher 
order of bill, and though giving money is payment, it 
is not satisfaction until the money is exchanged away 
for something that is desired. Thus, though a shoe- 
maker is paid when he gets money for his shoes, yet 
he has not got a satisfaction until he has got bread, 
or meat, or wine, or anything else he desires in ex- 
change for the money. We have seen that the early 
economists expressly pointed out that money is only 
an intermediary in exchanges : it is only a general 
bill of exchange, or right, or title, to be paid in some- 
thing else. They only considered the exchange as 
consomme or completed, when products had been ex- 
changed against products " (Macleod, E. E., p. 219.) 
The great danger from a fluctuating or unsound 
currency consists in the character of the credits it 
engenders, and the facility it gives to obtain posses- 
sion of things which have not been earned. Indeed, 
a credit money, Avhen not, as in the case of govern- 
ment notes, 2i forced loan, cannot be put into circula- 
tion without placing so much property or goods as 



MONEY AND CREDIT. 219 

they represent or command into hands other than 
the owners or producers thereof. The problem seems, 
then, to discover some method of measuring and com- 
pensating the transfer of goods so as to make each 
party thereto secure in obtaining an equivalent for 
that which he parts with. When a promissory note is 
given in exchange, whether of the other party of a 
corporation or of government matters not, its valine 
consists ivholly in the probability that it will be redeemed 
at maturity, or, if on demand, at presentation. For 
upon the question of its redemption depends alto- 
gether whether the owner will have sold or given 
away his goods. 

But even assuming that the note is certain of re- 
demption, or, at least, of enabling the holder to ob- 
tain that for which he really sells the goods, there is 
still the element of debt in it. The issuer, banker, or 
government has consequently obtained so much val- 
ue for which no satisfaction has been given, nor does 
there appear any means other than this by which a 
money can be put in circulation, except it be a com- 
modity money, or a money issued upon a deposit of 
commodities, as a gold or silver certificate, or a cer- 
tificate of some responsible custodian that commodi- 
ties, or goods, or services are held subject to order. 
In that case, there would not be a credit but an actual 
exchange, the purchaser receiving his goods and the 
seller the order for his, or for their value, to be had 
at his pleasure. Such certificates could effect ex- 
changes with security and facility, if some means of 
divisibility were discovered so that larger or smaller 
purchases could be made with it. 

This description of money would not constitute 



220 SOCIAL WEALTH. 

credit in the purchase. To make a pure credit it is 
necessary that one shall be able to buy commodities or ob- 
tain money ivithout exchanging anything for them. A 
lien upon the goods themselves would prevent their 
use or disposal, and so constitute no proper transfer. 
A pledge of other commodities or mortgage might be 
given, but then their disposal would not be allowed, 
and would be equivalent to a mortgage or lien upon 
the purchase itself. 

Therefore, credit money, or an actually pure credit 
of any kind, is possible only where one party pur- 
chases something from another, to pay for ivhich he has 
nothing but the thing purchased. I am not speaking of 
transactions between parties well known to each 
other, in which one may not have, at the moment, 
available currency to meet the balance of an ex- 
change. Selling goods on short time without inter- 
est, or keeping running accounts with periodical set- 
tlements, is usual in all lines of trade, and, though 
attended with some risk, is followed from its greater 
convenience as compared with cash settlements in each 
separate transaction. It is not at all from such trans- 
actions that interest on debt arises, but from the bor- 
rowing of means to do business with, or to antici- 
pate one's earnings, or to live in advance of one's 
income. The other form of dealing, popularly called 
credit, equally desired by purchaser and dealer, 
doubtless facilitates exchanges and indirectly has- 
tens production. But it is not because credit is pro- 
ductive, but because the confidence and mutual trust 
these parties put in each other enable them more 
readily to adjust supply to demand. To say that 
credit, per se, is a productive force, is to assume that 



MONEY AND CREDIT. 221 

it creates sometliing from nothing ; since the borrow- 
ing of a liorse or a plow does not make any more 
horses or plows than there were before. And when 
I have borrowed a hundred dollars of a friend, it by 
no means adds a hundred or a single dollar to the 
general amount of circulation. Borrowing money or 
anything else, in its exact sense, can only be justified 
in great necessity ; and lending is then enjoined as a 
moral, not as an economical, action, usury for which is 
clearly a moral wrong. Of such necessity, too, the 
lender must be the judge. For of the numerous small 
or large sums one lends during his lifetime, seldom 
one turns out to be more than a temporary relief to 
the borrower, even when never called upon to repay ; 
and often proves an injury by encouraging mendi- 
cancy. A friend of mine who had many years ago re- 
tired from active business with a small fortune, mostly 
ready money, told me that he was adopting my ideas 
about interest and thought that he was really doing 
much good by loaning to poorer people his money at 
a lower than the legal rate of interest. The last time 
I saw him, however, on inquiry as to his experience, 
he said he could not point to one whom his loans had 
permanently benefited ; that most of those who had 
given mortgages on their homes had failed to keep 
up the payment of the interest, and that he had 
made up his mind that, however advantageous credit 
might be for the unscrupulous who held good se- 
curity, it was bad for everybody else, borrower and 
lender alike. 

It is this intimate connection between money and 
credit, indeed, their identity, which makes all legis- 
lation in regard to it a doubtful and uncertain ele- 



222 SOCIAL WEALTH. 

ment. The whole subject of legal tender turns upon 
the laws for the collection of debts. Without their 
existence no legal tender, but only a general tender, 
would be required ; because all our experience in 
currency shows that a bank note or a treasury note, 
other than legal tender, will affect exchanges just as 
well as gold and silver. Indeed, the first issue of 
treasury notes in the late war continued at par, while 
the legal tender greenback declined to less than one- 
half because the government refused to take it for 
duties on imports, or to pay Shylock in what an- 
swered well enough for soldiers, and, indeed, for 
every branch of industry and healthful business. The 
history of that time shows how readily business and 
industry accommodate themselves to circumstances, 
and how little honest work need depend upon the 
fostering care of the government. When the govern- 
ment became embarrassed by the needs of a gigantic 
war and entered on a career of enormous credits, gold 
and silver, and even nickel and copper currency, took 
themselves out of the factory and warehouse. The 
state banks furnished dollars (paper), but no change. 
Immediately the postage stamps fell into its place by 
general consent, mucilage and all, although they had 
no legal power to pay debts. The government, tak- 
ing the hint from tliis circumstance, gave out the 
postal currency, which served an admirable purpose 
till the change crept out of its hiding-places, some 
years after the war had closed. 

In reviewing that period we see how it was prin- 
cipally the matter of credit that was affected by those 
changes in the currency and its values. To persons 
who exchanged substantial values on a certain day 



MONEY AND CREDIT. 223 

it did not matter wlietlier the dollar was twenty-five, 
fifty, or one linndred. The ratio between their two 
commodities remained the same. Differences only 
arose where commodities were in process of exchange 
or in transitu. It was, however, where debts were due 
that the great disparities were seen. Immense 
amounts of mortgaged property were redeemed at 
fifty per cent, and even less, by taking advanrage of 
the legal tender paper. In 1864 I sold, for a friend 
residing abroad, gold at 2.60, and paid off a mortgage 
which had been given just before the war when gold 
was exchangeable at par. 

But money borrowed during the war was subjected 
to the reverse action as the premium on gold receded. 
Other commodities, of course, receded with gold so 
that the borrower had, by so much, less to pay with. 
That is, he had to pay his debt, which was contracted 
in dollars at seventy-five or fifty, in dollars at one 
hundred.'^ Doubtless this contributed largely to 
precipitate the panic of 1873 ; but in reality the same 
or a similar thing takes place, independent of any 
change of the currency, whenever credits are extended 
and then shortened. The impulse which credits give 
to production, and which at first yields profits, ap- 
pearing to justify the claim that credit adds to pro- 
duction, really reduces by so much the ratio of that 
production in the long run, as an abundant crop re- 
duces the price of grain. But by the time payments 
are required and credits drawn in the prices of goods 

*The idea of " honest money " as held by the capitahstic mind, is 
the same as that which would be entertained by a merchant as to the 
" honest balance," with a movable fulcrum he shifted at will, as he 
bought or sold in the same scales. 



224 SOCIAL WEALTH. 

are so reduced that, in addition to being minus the 
interest paid, which equals the principle in every ten 
or twelve years, the borrower has to pay his debt in 
money worth one hundred and twenty-five to one 
hundred and fifty in its ratio to the commodities he 
manufactures or deals in.* 

The view taken of credit and interest, or usury, is 
often confined to the lender and borrower ; especially 
as to the moral aspect of the question. We can con- 
ceive of circumstances where neither would be ad- 
vantaged or wronged by it. A man himself paying 
interest or rent and having values due him, or lend- 
ing means to an importunate friend or neighbor, 
would not be benefited ; because by paying so much 
upon his own indebtedness he could save the pay- 
ment by himself of so much interest. The friend, 
moreover, may, by the aid of the money borrowed, 
buy a house or pay off a mortgage and thereby save 
in rent or interest what he pays as interest to the 
lender. So that as between these tiuo there may be 



* This principle is well illustrated in the speculative farming which 
has been carried on for several j-ears in the West. So flattering had it 
become, that many went into it with borrowed capital. This enabled 
tlie special production to wliich it was directed to be largely increased, 
resulting in a great decline in the price of wheat, and in the ruin of 
many of the wheat-growers who had believed that credit was produc- 
tive. Such diversion of goods to speculative production tlirough credit 
doubly afEccts exchange : reducing the price of the product by increas- 
mg its supply, while reducing the demand by withdrawing labor from 
or ceasing to employ it in other industries whicli produce the things for 
which it may be exchanged. The past year lias been one of great dis- 
aster to such production and a bounteous harvest for tlie Shjdocks, 
while the small farmer, who resisted the temptation to use credit, is 
comparatively prosperous. 



MONEY AND CEEDIT. 225 

notliing which is morally wrong or economically un- 
justifiable, because the interest paid and received by 
each may balance each other. 

But it is as a social question that its true nature 
appears ; because this payment of interest, how far 
soever it may be shifted, and all the more certainly 
because it can be so shifted, falls at last upon the 
labor which produces the social wealth. And it is 
because credit no more than other forms of capital, 
excepting land and labor, can produce anything, that 
usance paid for it is immoral and unjustifiable. 
Credit under these circumstance becomes pernicious, 
because it not only helps to keep up the interest 
fraud, but becomes itself a means of doubling and 
trebling the amounts abstracted from the labor and 
the land by this subtle and widely diffused sj^stem 
of robbery. 

A man of large means and financial probity can let 
out all his money on well secured property and yet have 
credit for large amounts. This credit, as shown by the 
economists, is as really ca23ital as his gold and silver, 
By establishing a bank and issuing notes without in- 
terest, as the banks are authorized to do, he can let 
them out to business men on good security, and so 
derive an income from what he owes. The national 
banks are contrived for precisely this business. By 
lending a hundred thousand to the government, 
ninety thousand is returned to them to let to the peo- 
ple, who are also paying to the banker his interest 
on the whole hundred, and not unfrequently on their 
own deposits also. But it is not necessary to particu- 
larize persons or classes. The evil lies in the vice of 
seeking control of that which we have not earned, 



226 SOCIAL WEALTH. 

whether on the part of debtor or creditor. The evil 
of credit is of wide social effect, and permeates all 
fields of industry and commerce. 

Did any way appear to retain credit and abolish 
interest, it might be unnecessary to antagonize credit. 
But until an available way to accomplish this is 
shown, it must continue, as now, to be the basis on 
which usury rests, and is really equivalent to a mo- 
nopolized control of the land, since the law cannot 
interfere to enforce the credit contract without in- 
volving the right to control the person and service of 
the man and the result of his labor upon the soiL 
The intimate relations of these questions were recog- 
nized as early as the time of Solon. To repeal all 
laws for the collection of debts would effectually dis- 
pose of the credit question, I think, without doing 
the least injury to industrial production or making it 
any the more difficult for the poor to employ them- 
selves or to conserve the results of their toil. The 
only parties it would unfavorably affect would be the 
irresponsible business adventurer, or the would-be 
spendthrift. Usurers and stock gamblers would have 
more difficulty in finding victims to fleece, and be 
wholly unable to lay industry under tribute, as now. 

But it is a long time before our people, through 
legislation, are likely to do anything so sensible as 
this, and it is even too much to expect that they will 
repeal so much of the laws as now enforce tJie collec- 
tion of interest or of any debt, the principal of which 
has already been paid b}' instalments as interest. 

The money of commerce would be such as growth, 
experience, and general consent made it, if govern- 
ments would take their hands off", since commerce, if 



MONEY AND CEEDIT. 227 

left to itself, would soon provide its "instruments 
of exchange." Government should at least cease to 
do what it has for the last quarter of a century, and 
indeed, through its whole history, been doing, play 
into the hands of the spoilers, and make the currency 
a football for the stock gamblers and usurers. The 
form which money will ultimately assume will doubt- 
less be a currency based upon labor, so as to make 
the labor of any member of society, however humble, 
a general tender for all such desirable and useful 
goods as are in supply ; but at that time commerce 
will have ceased to be the agent of the pirate and the 
freebooter, of a privileged or idle class, and become, 
what it is capable of becoming, the hand-maiden of 
social industry and universal reciprocation. 



CHAPTEE Xy. 

OF VALUES OR ECONOMIC RATIOS. 

According to the later school of economists, " Val- 
ue is a desire of the mincl," and signifies the estima- 
tion in which a thing is held. But it is evident that 
in order to give this desire any logical expression, the 
thing must be compared or measured by something 
which is external and objective. To say that a man de- 
sires, esteems, or values a horse has no meaning 
until a comparison is made with something which he 
is willing to give for it. And whatever the thing or 
amount of money, or commodities, he is willing to 
part with to obtain it, turns at last upon how much 
labor or life-force he is willing to bestow on the pos- 
sessor of the horse in order to make it his own. It 
is this consideration which moderates the blind de- 
sire and reduces it to some regular form where it 
can be recognized as a force in social affairs. It is 
subject also to another regulating principle which 
modifies and limits it. A madman may desire a 
means to destroy another's life or his own. An ine- 
briate may desire liquor though its use brings delirium 
tremens. But these desires, and all others which seek 
unnatural and illicit gratification, cannot enter into 
any economy of social life or justify any social trans- 
action. It is inconceivable how anyone can desire or 
value that which is not productive of some useful 



OF VALUES OR ECONOMIC RATIOS. 229 

results, either to self or to others. That some child- 
ish whim or habit may make things desirable to the 
uninformed or diseased mind, which injure the in- 
dividual or society, cannot change the general fact 
that why things are desired or valued is because of their 
ability to sustain and prolong human life and increase hu- 
man happiness. That the individual may think some 
possession desirable to him which will wrong or in- 
jure another will not prevent society from acting 
upon its sense of the " greatest good." If these esti- 
mations conflict or disagree, it becomes the business 
of science to reconcile such contentions. The prin- 
ciple of utility enunciated by Jeremy Bentham, and 
supported by Mill, Spencer, and other noteworthy 
authors of ancient and modern time, as the great 
moral motive governing mankind, is certainly the 
force controlling all intelligent social and economic 
interchange, whatever its exact place in morals. The 
ignorant and imbecile, controlled by blind prejudice 
or feeling, may fail to act from it ; but this does not 
discredit the principle, for, even in these cases, the 
estimate is based upon what they imagine or believe 
will be most useful or serviceable to themselves. 
So that if value is merely a desire, it is, at least, a 
desire for some real or imaginary good to self or to 
others. By the definitions of economists, therefore, 
value is dependent on utility and service. 

" You see that utility, under whatever form it pre- 
sents itself, is the source of the value of things" (J. 
B. Say). ■ 

" There are three orders of quantities, and only 
three, which satisfy tiie definition of wealth, and 



230 SOCIAL WEALTH. 

these may be symbolized by the terms — Money, La- 
bor, and Credit " (H. D. Macleod). 

But since money is but a " work tally," and since 
credit is but a promise to render service or some de- 
sirable tiling in Avliicli services of utility are incorpo- 
rated, or, at most, a right to demand them, value is 
necessarily derived from its source, the utility of 
things, through labor. Keally, then, the only means 
of giving value to anything, or of rendering available 
the utilities in natural things, is by useful service. 
The term value is, however, too equivocal to be safely 
employed without specific definition In trade, to 
which economists now wholly confine economic in- 
vestigation, the word is more often employed to mean 
the exactly opposite thing to that which they insist 
is its meaning, as, " I am paying you more than the 
value of these goods," or, " I am selling them to you 
far below their value." It is said that "commercial 
bargains are the delight of the Greeks, and they often 
manage to part with their wares to the Turks for 
twice their value." 

The only proper thing seems to be, then, to dis- 
tinguish Value in Use, Yalue in Service, and Yalue 
in Exchange. 

Value in Utility is an invariable proportion. 

Value in Service is a stable proportion. 

Value in Exchange is a variable proportion. 

Preferably to value, however, I use the term ratio. 
The ratio of utility is the proportion which one thing 
bears to another in its ability to yield sustenance to 
human life or to supply its varied needs and desires. 
This ratio is unvaryi7ig. A hundredweight of the 
same quality of wheat will at all times and places, 



OF VALUES OE ECONOMIC RATIOS. 231 

otlier things being equal, sustain animal life to tlie 
same extent, whether it cost ten dollars, or is so 
plenty as to be had for gathering, or so cheap as to 
be used for fuel, as corn sometimes is in our grain - 
growing states. The ton of coal, of same quality, 
will give out the same proportion of heat, make the 
same amount of steam, and raise the same number of 
foot pounds, whether it cost five dollars or nothing 
but the labor of picking up from the ground, and 
maintains a constant ratio in that respect with wood, 
coals of a different character and grade, peat, oils, 
and all other substances used for fuel. A pound of 
wool will yield the same amount of yarn or cloth, 
whether it cost a dollar or a dime, and holds a fixed 
relation, as to use, with cotton, flax, silk and other 
fibers suitable to be turned into fabrics. 

Upon this ratio of use everything which can claim to be 
exact in economics depends. But in the differing judg-' 
ments of men a difference of estimation occurs, as 
people will disagree as to whether it is hot or cold in 
absence of a physical thermometric standard. 

But this ratio, although it may not be clearly ap- 
prehended by the many, is, nevertheless, an invari- 
able proportion, capable of being ascertained with ex- 
actness in every industrial or economic relation. 
And no commerce or industry can long endure which 
ignores it. The ignorance, deceptive teaching, or 
trickery which at present renders it obscure in busi- 
ness operations no more brings it into doubt than 
does the inability of a child to compute the product 
of a certain number of pounds at a certain rate, in 
consequence of which he gets cheated by the dis- 
honest merchant, throw doul^t upon tlie truth of the 



232 • SOCIAL WEALTH. 

multiplication table or upon the exactness of tlie 
pound as a unit of weight. 

The Ratio of Service is a stable ratio, and relates, 
first, to the human energy exerted ; second, to the 
time through which it is exerted, and third, to the 
utility of the resulting product. 

Of these three elements, utility is a certain and 
unvarying proportion. Time also is capable of mathe- 
matical measurement. And the energy is also ascer- 
tainable with sufficient practical accuracy. A daifs 
or an hours worl', as to what should be its product, 
is quite generally well known in every trade, profes- 
sion, and calling. It is hence apparent that the vast 
inequality found to exist in society, in relation to 
compensation of service, must be attributed to causes 
wholly outside of any natural law of exchange. For 
the tendency to equal compensation for services of 
equal utility is as inevitable as the finding of its level 
by the water of the ocean. 

The utility of a service naturally determines the 
ratio of its compensation. For however hard a man 
may labor, if he produces no useful result, the labor 
to him is void. And by no equity can he exchange the 
results of such negative service with the more useful 
result of another's toil. He will only be able to do 
this by taking advantage of the childish estimation 
of others or of crude social and civil institutions. 
The services which the speculator, usurer, slave- 
holder, landlord, the gambler, burglar, or highwayman 
perform, are not compensated by any economic law, 
but by the law of cunning, fraud, and usurpation ; for 
wherein the services are without use, they can only 



OF VALUES OR ECONOMIC RATIOS. 233 

command pay by tlie exercise of brute force or by the 
aid of state power and barbaric custom. 

By equal compensation we are not to understand, 
necessarily, an equal sum of money for an equal 
number of day's work ; for not only will some day's 
work effect greater utility than others, but some em- 
ployments are much more exhaustive or involve 
greater hazard to life and health than others. It may 
serve to silence the objector to the equitable view to 
remark, however, that, even should society, by some 
arrangement, or by any movement to " establish jus- 
tice," arbitrarily make all compensations equal, the 
emploj^ments which require culture and talent would 
still be sought by those best fitted to them. The artist 
would paint pictures, model clay, or chisel marble in 
preference to digging ditches or breaking stone, al- 
though the compensation were no more for the one 
than for the other. The clergyman would preach in 
preference to holding a plow ; the lawyer would 
plead and counsel clients in preference to sawing 
wood ; the merchant would serve customers in iprei- 
erence to grooming animals, and the prima donna would 
sing at the opera in preference to croning in the nur- 
sery or even to acting the " walking lady " before the 
scenes. Exceptions to this rule would merely show 
that some had adopted an employment not suited to 
their tastes and qualifications, because forced by cir- 
cumstances or allured by cupidity. 

To throw discredit upon the proposition of Adam 
Smith that labor is the creator of value, the later 
economists, after having defined value to be merely 
the amount of money a thing will sell for at a given 
place and time, attempt to show that the same 



234 SOCIAL WEALTH. 

amounts of labor produce values most unequal ; that, 
indeed, the great values, as of land, stocks, and other 
speculative capitals, are not produced or based upon 
any labor whatever. Yet even these are determined 
and upheld by the amount of interest, rent, or profit 
they exploit from labor. Right to place and oppor- 
tunity are in their nature indefeasible, and the laws 
or customs which sanction traffic in them are the out- 
growths of forceful or fraudulent usurpation. The 
income such perversion enables the land or money- 
lord to exact is derived wholly from the uncompensated 
labor, or is a draft upon the fertility of the soil. In 
order that a person may procure and enjoy the uses 
existing in natural substances or forces, it is neces- 
sary that he put forth the requisite exertion, or makes 
the effort or sacrifice necessary to obtain them. The 
proportion thus realized may be said to be the 

RATIO OF SERVICE AND COMPENSATION. 

The ratio of service is the proportion of utility a 
service secures. The ratio of compensation is the 
proportion of such use enjoyed by the doer of the 
service, whether acted upon in the social life and 
system of exchanges or subverted at the will of a des- 
potic individual or class control. And this seems 
conclusive with respect to equal compensation for 
equal time, since, if one increases in a given time the 
utility of a product ten, and another is able to in- 
crease it twenty in the same time, it is clear that the 
service, and hence the compensation, of the latter 
would be double that of the former ; for time, though 
an important factor, is not the only one in determin- 



RATIO IN EXCHANGE. 

ing the ratio of service and of compensation. The 
ENERGY exerted through the time engaged and the 
thought employed are also elements in the produc- 
tion and consequent compensation. 

RATIO IN EXCHANGE. 

Unlike the ratio of utility, which is a constant 
quantity, the ratio of exchange is an ever-varying 
one, subject to a variety of fluctuations from a va- 
riety of inciting causes — as by the occurrence of 
plenty or scarcity, the changing tastes and fashions, 
by imperfect judgments and erroneous estimates of 
people, forestalling and purposed manipulations of 
trade, and by bulling and bearing the market, result- 
ing in insane advances, followed by corresponding 
declines and actual " panics." Disproportionate sup- 
ply results mainly from unequal application of labor 
to desired uses or from unequal products from the same 
labor, as when a crop is more than usually abundant 
or short. The same result follows in the tendency 
among a people to engage in new enterprises, or in 
the production of a particular commodity or crop, 
which has come into popular favor and promises ex- 
tra remuneration. The effect of fashion to change 
prices, especially in matters of dress, must be famil- 
iar to all. Every merchant or manufacturer has ex- 
perience of the loss sustained by allowing a stock of 
goods to remain on hand until they have become un- 
fashionable. 

The result of forestalling and molding the market 
to raise or lower prices needs little illustration. The 
methods are too numerous and varied to be described 



236 SOCIAL WEALTH. 

here. It is sufficient to point out that, under mo'nop- 
oly of the raw material, and the forced competition 
resulting from that cause, it is easy for those con- 
trolling capital to put down the price in the market 
below the mean when they seek to purchase for hold- 
ing, and to put up the prices above the mean when 
they wish to sell. They are thus enabled, not merely 
to take advantage of the ordinary variations in sup- 
ply, but to create artificial supply or scarcity as suits 
their purpose, and so think their capital has earned 
something when it has merely taken the earnings of 
labor. It is pointed out by some economists that 
such tampering with the market must lead to disaster 
to those who attempt it ; but it is hardly denied, I 
think, that such manipulations occur, for dread of 
disaster does not prevent gambling ; and that they 
greatly affect the fluctuations of price is well known. 
That is the only question I am discussing now. It 
will be seen elsewhere that those who have exclusive 
control of the laud have the power to and do change 
wholly the fluctuation in its price from a variable 
ratio, vibrating each way from a neutral point to a 
constantly advancing ratio, ivliich never recedes. 

The fluctuation in the price of things uncontrolled 
by monopoly must necessarily rise above the mean as 
often and as far as it falls below the mean. The pen- 
dulum swings as far to one side of the point of rest 
as to the other ; the tide rises to the same height 
above and falls to the same depth below the general 
leveh Hence the cornering of land places that out- 
side of the economic law, and proves it not a proper 
subject of traffic. There is also a fictitious element 
in trade, which cannot be too soon exposed and ex- 



EATIO IN EXCHANGE. 237 

purgated. It is tlie assumption of money arbitrarily- 
created as a standard of value or mean ratio in ex- 
change. It is absolutely certain that gold or silver, 
wMch are made legal tender, and thus despotically 
made the mean, are far more fluctuating in their 
value than iron, tin, or copper, and that in long 
periods even more than the cereals, or any staple 
product of human labor. The manipulators of the 
market have, therefore, not only the advantages I 
have pointed out in respect to land and monopoliza- 
ble commodities, but the power, by locking up the 
tenders, to shift the mean or standard by which prices 
are determined from time to time. 

It now seems only necessary to ascertain the rela- 
tion which the ratio of use sustains to the ratio of 
service and compensation, and through that to the 
ratio of exchange, in order to form a basis for the es- 
tablishment of a science of industry and social eco- 
nomics as exact as any of the physical sciences. 

The Theorists, if such term is due them by court- 
esy, who propounded the " balance of trade " as a 
government jDolicy, made but little pretense to exact- 
ness, but entrenched themselves behind the narrow- 
est prejudice. The French economists built upon 
one economic factor, the produce of the land, while 
ignoring labor, except as a dependent adjunct. The 
English economists built upon the other factor, 
" labor," evading, however, its relation to the land. 
The American economists of the Carey school recur 
to the " balance of trade " to correct the omissions 
both of the French and of the English schools, but 
fail to apprehend that it is both " land and labor '' 
which are involved in any and all industrial produc- 



238 SOCIAL WEALTH. 

tion, and that freedom in the union of the two is es- 
sential to anything like freedom of exchange. Now, 
since no desirable thing can be produced, even in its 
trade sense, without labor and its application to the 
land, it follows that the ratio of cost is proportionate 
to the extent of such application, and since these 
two factors only are concerned in the production of 
any goods whatsoever, these factors only can be con- 
sidered in any attempt at a scientific system of di- 
vision. As between the two, then, the land and the 
labor, the economic principle is this : To the land 
goes, in the long run and wide range, as much of 
every element as has been taken from it. It would 
be too violent a stretch of the most elastic of eco- 
nomic principles to make them cover the reduction of 
the fertility of the soil and the exhaustion of its 
power to reproduce. The utility of any commodity, 
therefore, consists in that reduction to form or 
adaptation of it for use ivhich abstracts nothing from 
the soil but what loill be returned to it. And as the ele- 
ments of fertility go back to the land, so the uses go 
to the labor. This constitutes what Adam Smith 
designates " the natural rate of wages," " the whole 
product of labor." Without discussing this proposi- 
tion as scientifically exact, we may say, with entire 
exactness, that it constitutes the ratio of utility in 
the service, and, therefore, the mean ratio of ex- 
change. All fluctuations or variations from this mean 
arise from causes set forth above, or of a character 
kindred to them. 

It will be assumed that things may have utility 
which require no labor, as air and water, which are 
essential to life and health. But these can have no 



RATIO IN EXCHANGE. 239 

relation to exchange until tliey are privately appro- 
priated, and hence, in a state of nature, are outside of 
any problem of exchange. If it were possible to 
monopolize the air and water, as it is to appropriate 
them to a limited extent, so as to make them ex- 
changeable commodities, they would then, indeed, 
command a price, but their ratio in exchange would 
still correspond to the amount of labor required to 
store them and guard and maintain the monopoly, or 
upon the service which they would impose upon those 
who had no means of escape from the operation of 
the usurpation. 

The importance of a branch of social science rest- 
ing upon so flimsy and kaleidoscopic a base as value 
when economically defined must be seen when we 
reflect that the causes which give rise to the most 
extreme fluctuations are not natural but wholly arti- 
ficial, and are constantly being affected by partial and 
class legislation and by crudely unjust social and 
civil customs. We can conceive of the indignation 
the free trade economists would exhibit should a 
" protectionist " assert that the high prices under a 
prohibitory tariff were nothing but the result of the 
natural laws of trade; but their assumption that, 
under the commercial monopoly of the land or the 
ownership of the laborer, we have an equitable or 
any natural system of exchange, is far more mon- 
strous and truth defying. While traffic in land re- 
mains, equity in exchange is impossible under protec- 
tion or free trade, and the productive laborer of any 
country is subject to certain despoliation, which is, at 
most, a shade worse or better under one or under the 
other. Neither theory has any warrantable interest to 



240 SOCIAL WEALTH. 

which the attention of the wealth-producer need be 
turned. 

We have seen that even where both land and the 
laborer are owned and treated as commodities, the 
ratio in exchange still depends upon the amount of 
labor any commodity or proprietary right enables it 
to command. The value of a right to hold a slave 
must, in the economic analysis, depend wholly upon 
the amount of labor or service such right will enable 
the holder to exact. So ownership in the land can 
give such value only as is measured by the amount 
of labor which such ownership empowers the owner 
to exact from those who cultivate, occupy, or improve 
it. It is impossible to conceive of a commercial 
value in any thing which is not measured by the 
amount of labor it has cost to produce it or will cost 
to reproduce it, or that it will command. 

It is plain that nothing can be considered actual 
service but that which has promoted the production 
of some useful thing or rendered a useful service to 
some member of the human race. The natural com- 
pensation of any service consists in the good or goods 
it has added to the stock of human well-being. But 
it by no means follows that, under the rule of arbi- 
trarj' social and civil institutions, and of immoral 
and subverted relations, these compensations will be 
equitably distributed, or have any just division. That 
is the crowning fallacy of the economists. In fact, 
under such rule, they are sure to be unjustlj diverted 
from their natural tendency. But what I wish par- 
ticularly to empliasize here is that however sub- 
jected and enslaved labor may be in any place or 
period, it is the labor alone which begets the in- 



RATIO IN EXCHANGE. 241 

creased utilities, and that sucli utilities constitute 
the compensation with which nature responds to the 
application of such labor. Onl}^ the man whose power 
and will subject another, and who virtually owns 
his labor, can appropriate that other's natural com- 
pensation. It can be accomplished only in a general 
way by laws or customs enforcing servitude ; by en- 
grossing land and opportunity, and by the social 
sanction of false estimates and fraudulent accounts 
in exchange, or by a deceptive and shifting standard 
of value. Service or labor is now seen to be the par- 
ent of all created goods and of all realized utilities. 
The natural utilities, as of the land and opjDortunity, 
are not exchangeable with service or goods produced 
by labor ; for the reason that they are nature's, and 
must be purchased first from her, and have and re- 
quire no labor in their production. 

That labor or service is the basis of the ratio of 
exchange may be seen from the very nature of the 
fluctuations of value in commerce, even under the 
iniquitous system of prevailing trade. These fluctua- 
tions constantly tend to a mean or equilibrium, which 
corresponds in every respect to the ratio of use. The 
cereals, for instance, tend to that relative market 
price which corresponds to their ability to support 
human life. Wool, silk, cotton, flax, etc., tend to a 
price relatively corresponding to their ability to pro- 
mote the comfortable and becoming clothing of man- 
kind. Lumber, bricks, stone, and other building 
material, tend to a price relatively proportioned to 
their usefulness in efl'ecting shelter and ministering 
to the comforts and enjoyments of life. 

The Ratio op Service, as determined by its util- 



242 SOCIAL WEALTH. 

ity, is, therefore, the mean ratio of exchange, and to- 
wards wbicli it constantly tends as to a point m 
equilihrio in all its fluctuations, from above or from 
below, caused by whatever disturbing forces. Other 
things being equal, these fluctuations rise or fall to 
the greatest extremes in things where a single or 
limited use is served. Articles of mere taste, fancy, 
or fashion are subject to great inflation, and to be 
reduced to a valueless condition by a change in pop- 
ular whim. Thus grain is maintained from extreme 
depression, even in very abundant years, because it 
can be turned to a number of uses, and, by being fed 
to cattle, sheep, and swine, can be converted into 
beef, mutton, and pork, and thus have its value con- 
served for other years. If some commodity could be 
found which would serve every requirement of hu- 
man need, it would have an unvarying rate. 

No such commodity being found, it is still conclu- 
sive of the principle, since every additional or extended 
use to which a thing can be put reduces, in a jDOsi- 
tive degree, the extent of the fluctuations in its ratio 
or price from the mean. And labor or service, being 
the parent of all commodities and exchangeable in its 
varied forms, becomes the controlling element in ex- 
change, commands a stable price, and forms the only 
stable ratio. 

Our laws regarding money tend, in a high degree, 
to subvert or obscure this well-established principle. 
They take one commodity, gold, the least useful of all 
the metals, except for ornament, of a scarce and very 
irregular production, and whose relative value fluctu- 
ates in a series of years, more than that of any staple 
commodity, and under our economic system, which 



RATIO IN EXCHANGE. 243 

regards all values as constantly variable quantities, 
assume that this one value is invariable. With the ad- 
dition of silver to the standard, the great injustice to 
labor is only divided, not removed, and capitalism is 
constantly trying to demonetize that. Now, the only 
invariable ratio is the ratio of use, and labor, since it 
alone is able to supply all useful things not existing 
in nature, and is the sole agent in gathering and con- 
veying those naturally existing or which are sponta- 
neously produced, constitutes the only thing which 
can have stability in exchange corresponding in any 
respect to the ratio of utility. 

It is hardly necessary to point out that, for many 
generations, gold or gold and silver has been a mere 
basis and standard of value in the commercial world, 
while the promise to pay these has constituted mainly 
the currency and medium of exchange of most na- 
tions. It is foreign to the purpose of this inquiry to 
show how the method of issuing this credit money is 
productive of great evil to the interests of industry. 
Our business with it here relates to its assumption 
of a claim to which it is not entitled, and to the ex- 
tension of its usurpation, indefinitely, by means of 
multiplying promises to pay, promises which must be 
liquidated, if at all, in a commodity subject to every 
fluctuation known to trade. It is unnecessary to con- 
demn or justify credit money, or to intimate as to who 
should be authorized to issue it, but simply to point 
out that if it be used at all it should be made redeem- 
able in labor or in such commodities as can be most 
readily produced by the greatest numbers of the peo- 
ple, and should be expressed in days' or hours' ser- 
vice. We thus see the unstable basis upon which 



244 SOCIAL WEALTH. 

any system of finance or of exchange must rest wliicli 
denies the chiims of labor, discrowns it and sets up a 
goklen idol in its stead. The trade which it seeks to 
explain and justify is a subject not admitting of any 
scientific explanation. It is without reciprocation, a 
mere contest of cunning and false pretenses. It is a 
commercial duel in which the one party triumphs at the 
expense of the other. Professor Perry prides himself 
upon having discovered that two minds have to meet 
in determining price, or. in other words, that " it takes 
two to make a bargain," a proverb, I think, as old as 
modern English literature, at least. Some one may 
yet discover that it takes two to make a bet, to fight a 
duel, or to engage in a prize fight. Our science of 
trade, it seems to me, under these teachers, ap- 
proaches as near to true economics as the results of 
abet, duel, or prize fight does to a principle of juris- 
prudence, because such contests were sometimes held 
to settle differences between indivividuals or com- 
munities. To have the minds of two men meet, though 
one or both be ignorant and prejudiced, would be a 
singular method of deciding some question in as- 
tronomy or of proportion in chemistry, and should 
not be thought conclusive in economics. 

RATIO OP MATERIAL TO SERVICE. 

The ratio of exchange equitably relates, not only 
to service, but also to the proportion of earth in 
which such service is incorporated and conveyed. 
This applies not only to trade between nations, but 
also to that between sections of the same country, 
and between cities and the a^^ricultural districts more 



RATIO OF MATERIAL TO SERVICE. 245 

nearly related. A disregard of this principle inevi- 
tably impoverishes a people parting with a greater 
proportion of fertilizing matter from their land than 
is returned to it. The best lands are soon wasted in 
productive power by such a process, no matter how 
equitable or advantageous the trade in all other re- 
spects may appear. 

The economist must deal with proportions as they 
exist in nature, and not as they are ignorantly ac- 
cepted by the weak and dependent, through perverse 
circumstances or under duress ; except, indeed, he 
seeks to defend and perpetuate such ignorance, de- 
pendence, and subjection, or the abuses which spring 
from such misestimation. 

Our railroad system and great modern facilities for 
transportion, become but a vast means to advance 
the transfer of the crops, freighted with the fertile 
portion of the earth from the interior to the seaboard, 
or to large manufacturing or commercial centers. 
They, indeed, take back articles of use, some of 
which contain elements which, in their consumption, 
will go to increase the fertility of the soil, and also 
some commercial fertilizers, but, in the main, the 
balance is greatly against the country. 

If the " Balance of Trade " theory had embraced 
the fertilizers instead of the precious metals, as the 
basis of exclusion from exchange, it would have had 
some scientific importance. And if " Protection " 
meant an investigation into the proportional residue 
of fertilizing properties after consumption of ex- 
changeable commodities, and a careful adjustment of 
their application to the soils from which the supply 
is drawn, there would be some logical justification for 



246 SOCIAL WEALTH. 

the use of that term in economics ; but a high or 
prohibitory tariff may keep out of a country the very 
elements required to restore fertility, or reduce the 
amount or proportion received for our products. 

Besides, the most dangerous tendencies which re- 
quire to be guarded against are also active between 
sections of the same country where commerce is un- 
impeded by state interference, and where every fa- 
cility exists for the carrying on of the unequal traffic. 
So that if a tariff exerted any influence to prevent 
the transfer of earthy properties from one country to 
another, it could affect little in preventing, but much 
in promoting, the impoverishment of the land through 
such transfer to the business and manufacturing cen- 
ters and their wasteful discharge into the sewers. 

But what renders this exhaustive process most de- 
structive of all is the taking away from the land that 
portion of its produce which goes to the payment of 
rent, of interest on purchase money of the land, or on 
borrowed means to carry on the farm, and of profits 
to the dealer and speculator. For all these are a 
dead loss to the land or to the labor. The only ex- 
ception is where the landlord, banker, or profit- 
monger resides upon the estate or land cultivated, 
so that the products of consumption get replaced. 
In that case the labor suffers all. But even under 
the most favorable circumstances, the far greater 
portion of the produce which goes to these channels 
is exchanged by the holder for goods and manufac- 
tures which, in consumption, afford little or no fer- 
tilizing product. A tariff can have no possible power 
to check these drafts upon the land and labor of a 
country. Indeed, under the highest tariff this country 



VALUES OP LAND AND LABOE. 247 

has ever imposed, this exhaustive process has been 
going on in a constantly increasing ratio. The inter- 
est on our government, state, and corporation bonds, 
raih'oad bonds and interest paying stocks, held abroad, 
and rent for our own lands paid to aliens, has enor- 
mously increased during the last twenty-five years, 
and has proved wholly an exhaustive tax levied upon 
our soil and upon the remuneration of our labor. 
For all this vast drain on our land and on the ener- 
gies and life of our people, we have received abso- 
lutely nothing. It has all been paid for in privilege, 
in concession of private rights and other imponder- 
able and intangible forms of incorporeal and fictitious 
wealth. Nothing whatever which improves the land, 
or feeds, clothes, or shelters labor, has been returned 
for all the amounts thus drawn. 

VALUES OF LAND AND LABOR UNDER COJVLMERCLyEi SUB- 
JECTION. 

Commercial ownership of land or of labor operates 
to produce very remarkable transpositions of value, 
and of the meaning and application of terms. This 
has been noticed by the later economists, though 
they have failed to give it other attention than to 
illustrate their theory that value has no necessary 
dependence on labor. Macleod remarks that "so 
long as the science of economics was limited to the 
material products of the earth (and of labor), the phrase 
' production and consumption ' was perfectly intelli- 
gible and unobjectionable. But when the term 
wealth and the science of economics were extended 
to include labor and rights (dominion over the land 



248 SOCIAL WEALTH. 

particularly — the italics and parenthesis are mine) 
great awkwardness arises. For even though it is 
carefully explained that production means nothing 
but offering for sale, and consumption means noth- 
ing but purchase, it is very awkward to speak of the 
production and consumption of labor." It would be 
equally awkward to speak of the production and 
consumption of land. " Who," he asks, " would 
understand the' production and consumption of 
debts, shares, the funds, copyrights, patent rights, 
etc. ?" It would indeed be awkward, but it is the 
awkwardness which always attends the attaching of 
properties to things in theoretical assumption, which 
they do not possess — an awkwardness which has 
brought untold misfortune upon the workers of the 
world, and perverted the whole business and indus- 
try of society, and which renders the reduction of 
the science of social wealth to a mere matter of trade 
between sharpers. Otherwise the impossibility of 
classifying land and labor with commodities would 
become so apparent that the most pedantic econo- 
mist could not fail to observe it. 

Coupled with the definition of the land value, that 
it is the present value of the " right to the series of 
future products forever" we see what has been 
demonstrated in regard to rent and interest, that 
such value proceeds by a duplicate geometric ratio, 
while the actual production of wealth ouh' increases 
by an arithmetical ratio, thus not only covering the 
entire product of the associated industry of the 
world, but also the potential ability to gather an in- 
finite series of productions, which would absorb the 
universe and dethrone omnipotence. 



VALUES OF LAJSfD AND LABOR. 249 

There is but one method by which an increase can 
be obtained — for one to exchange his goods, if possi- 
ble, for a man or for land. If bj brute force, supe- 
rior cunning, or the rights of usurpation, enforced by 
custom or man-made law, he is enabled to buy a 
laborer, he could then make his surplus productive ; 
or under commercial monopoly of the soil he might 
buy a certain amount of land, when precisely the 
same results would arise. 

It will be observed that this absorptive process, 
whether carried on by the subjection of labor directly 
or through capitalistic appropriation of the land, de- 
pends altogether upon the numbers of workers who 
are brought under tribute. With one slave the owner 
could only command an increase or income which 
the labor of one could furnish. To realize the pro- 
gressive income he must, by the same ratio, reduce 
increasing numbers to bondage. And so the land- 
owner must, in the same ratio, multiply his farms and 
increase his tenants^ And as these basic relations 
attach themselves to other businesses, and as the at- 
tempts to obtain annunities from these sources pre- 
vail, the subjection of labor must proceed in the same 
ratio in every field of industry. So that, indeed, capi- 
talistic increase has and can have nowhere logical 
basis or aim, but in the progressive subjection of the 
land and of the labor of a people. And one must be 
over-credulous to suppose that economists who jus- 
tify or ignore these systems of industrial inversion 
will ever give logical consideration to the equities 
of the present system of labor compensation or of 
positive reciprocation in exchange. 

Now, where one or both of these usurpations exist, 



250 SOCIAL WEALTH. 

aud land or labor, or land alone, is made a marketable 
commodity and can be bought and sold as a basis of 
trade, of course tlie money or goods wliicli will ex- 
change for these fictitious rights will necessarily 
command the same service from the work of society 
as the rights themselves, and hence will tax the earn' 
ings of labor in the same degree. To realize this tax 
by any device whatever is to recur to one of these 
forms of usurpations over the man, or over the land 
he must cultivate to produce the things so taxed. 
And this so clearly appears in comparing the values 
of commodities with the values of these assumed 
rights over land and labor, that only the bare state- 
ment is required. 

The value of the laborer, when a chattel, depends 
wholly on the right to command his labor, and the 
amount of labor he can be made to perform. It con- 
sists of the present value of such labors as the slave 
shall ever perform, and if hereditary, of the possible 
labors of children and children's children to all time. 
Here is not only a producing but a imdtiplying factor, 
which, under the Malthusian idea of population, be- 
comes a progressive series, like capitalistic increase, 
by a duplicate ratio. Having by " a mere fiat of the 
human will produced " a commodity which contains 
this power of increase, the value can be readily im- 
parted to other commodities, exchangeable with it, 
however inert. Outside of such a system the value 
of such goods has a definitely determined measure, 
and is exchangeable with commodities of equally de- 
terminate and positive computation. But the value of 
the slave consists alone in his capacity to go on prodiccing 



YALUES OF LAND AND LABOE. 251 

commodities indefnitely for all time and multiplying 
liimself in his posterity. 

All commodities, proper, liave values consumable 
and specific. These values begin and determine 
in use. The value of labor, on the other hand, 
under its treatment as a commodity, is not a 
thing to be consumed, and, as Mr. Macleod says, it 
becomes " very awkward " to speak of it in that con- 
nection. It is for what it does that it is valuable, and 
this value attaches not only to what it will do to-day 
but for all time. The value of the land is the same 
in this respect, that it is accumulative, yet depending 
wholly upon the earnings of labor upon it, or the ex- 
haustion of its productive powers. 

It is the characteristic of all incomes without labor 
that their values depend wholly upon the increase 
per cent., which proceeds by equal ratios, while labor 
can only produce by equal differences. Thus values 
or properties may be multiplied to any extent, by any 
forceful or fraudulent device, begetting a rate of 
profit, rent, or interest upon it. Watered stock has 
the same value as original stock, and original stock 
becomes valueless when the two no longer yield an 
income. Here the distinction between value in use 
and value in capitalistic investment is drawn, and ap- 
pears where increase without work ceases, and where 
real and useful things are sought and mutually ex- 
changed for consumption. 

And the same distinction we drew between private 
and social wealth applies here also. Those things 
which are required for consumption by the individ- 
ual, which make up the permanent interest in family 
and social life, retain a stable value, though they 



252 SOCIAL WEALTH. 

are oiever employed to earn income. Those other 
rights and " incorporeal property " which infringe 
social right and absorb the fruits of social industry 
without return, are confined wliolly to rights over 
labor direct or through control of the land, which 
place values not in their utility to serve human needs, 
but in their power to lay the industry of society 
under a perpetually multiplying tribute. 

When a man buys a coat or a dinner, he regards it 
as of sufficient value to pay its fair jDrice, without any 
consideration as to whether it will enable him to earn 
an income without work. And this is true of nearly 
everything consumed by individual men and their 
families, or by the world generally. It is only the 
trader, the banker, or landlord who measures price 
by the profit, interest, or rent it will exploit. The 
laborer, for his day's work, anticii3ates the means to 
furnish food, shelter, and raiment for himself, his wife 
and children. So it is with the mechanic, artisan, 
or professional. 

Profit from the land can only arise from taking the 
award of nature from him who tills it, and profit from 
other property or stocks can only spring from the 
earnings of labor, since money or goods put into any 
enterprise have no power to increase or multiply 
themselves. 

Thus the worker is required to earn his own and 
all other incomes whatever by the devices of " pro- 
prietary rights," labor " contracts," and " legal ten- 
ders." In order to make him equal, or give him an 
equitable opportunity under deprivation of land, it 
would be necessary that the wages for his day's work 
should be paid in notes bearing compound interest, 



VALUES OF LAND AND LABOR. 253 

or calculating the thing in days' work, instead of dol- 
lars, for his year's labor of three hundred days, he 
should be paid a year and fifteen or eighteen days' 
labor of some one else ; and for his second year's 
labor he should be paid three hundred and thirty- 
seven days' labor, and thus increase for the third to 
the tenth in same proportion, when it would be five 
hundred for the last three hundred days' work, and 
for the second, third, and fourth decades in the same 
progressive proportion. 

Now, if the capitalistic formula had any possible 
equitable relation to industry and the exchange of 
services or commodities, it would require that the 
three hundred days' labor in his fortieth year should 
be paid in about two thousand days of the equally 
efficient and serviceable labor of some one else. To 
apply any such principle to the award of labor is 
seen to be too absurd to be stated. Thus it is seen 
that the increase of goods in whatever form without 
labor is not only logically but mathematically im- 
possible; and that all those values which are cre- 
ated by usurious taking are fraudulent, and not 
entitled to any social or economic recognition, except 
in so far as it becomes necessary to denounce and 
expose them. 

We thus see that the artificial capitalization of the 
land or of the labor begets a system of values, which 
are subject to no classification with values of utility 
or service, and are impossible to be exchanged with 
them, or to form any equation whatever in any prob- 
lem in which labor or its compensation is involved. 
And it is equally apparent that the later school of 
economists perceive this, and hence, by use of the 



254 SOCIAL WEALTH. 

equivocal term value, seek to reduce values of every 
kind to the meaning of its use in speculation and ex- 
ploitation. But this timely subterfuge cannot long 
serve. The very appeal to facts which this school 
makes suggests the absurdity of classifying land and 
labor with the products resulting only from their 
union, or of classing incomes without labor with the 
earnings of labor, or the wages of the toilers with the 
wages of the sijoilers. And thus the great learning 
and trained intellects of this school are destined to 
have a short triumph over the credulity of the people. 
They evidently comprehend the Niagara toward which 
the old school theory was drifting the craft of capi- 
talism, and so attempt to stem the current by ignor- 
ing labor altogether as the creative force, and by 
parading superficial truths and effecting a systemati- 
zation of phenomena dependent upon the very wrong 
it is endeavoring to uphold, show that wealth is a 
matter only incidentially due to work, but mainly 
the product of " rights," knowledge," " credit," etc. 



CHAPTER XVI. 



TAXATION AS A REMEDY. 



Taxation is defined as " tlie exaction of money from 
the individual for the service of the state." And 
though much has been written to explain the great 
" number of its practical difficulties and theoretical 
niceties," I am not aware that any one has given it 
its true economic definition. It has been supposed 
to have " two sets of considerations — those which 
affect the justice of a tax, and those which affect its 
productiveness." It is candidly admitted that " tax- 
ation, indeed, has so frequently been the means of 
perpetrating political injustice that the term has 
fallen into bad popular repute. Whenever the pro- 
duce of a tax is used otherwise than in the service 
of those who pay it, the tax is unjust. In its more 
oppressive form, it has been levied on conquered 
states for the benefit of the conquerors, and in this 
^ sense it has sometimes been called tribute. The di- 
rection which all constitutional struggles to cleanse 
taxation from injustice have taken, has been that of 
self-taxation " (Cham. Enc). But the extent to which 
such struggle has yet attained has been merely to 
couple taxation with representation. Beyond this it 
has not as yet reached any well-defined principle. A 
majority rule of the whole people cannot make an 
unjust thing just, any more than an oligarchy or a 



256 SOCIAL WEALTH. 

czar. I do not wisli, however, to discuss the subject 
in its political aspect, but simply to inquire what the 
tax is in economics. A voluntary contribution for 
certain objects of a general or a social nature may, or 
may not, have an importance economically, since, if 
it be a gratuity or donation it may have no relation 
to an exchange, but if it refer to a matter in which 
the party has a personal interest, or even a desire to 
see certain social aims accomplished, it is reasonable 
to conclude that he considers the satisfaction expe- 
rienced equivalent to the contribution. But any in- 
voluntary tax, by whatsoever authority imposed, is 
in the only sense in which it can enter into any eco- 
nomical problem a " compulsory exchange." 

That the taxes assessed under the most popular 
governments are mostly used " otherwise than in the 
service of those who pay it," is simply notorious ; 
the only circumstance appearing to the contrary 
being the fact that, in direct taxation, capital pays 
the main proportion immediately ; but it is always 
sooner or later shifted to productive labor, which 
ultimately pays alL The tax is often wholly squan- 
dered in the interest of profit-mongering speculations. 
Taxes on land are not taken from the rent, as held by 
the advocates of " Land Nationalization " and " Gradu- 
ated Tax," but are an additional extortion perpetrated 
upon labor, and generally in the interest of an ex- 
ploiting class or clique. 

But really the tax, however scrupulously applied, 
and to the benefit of the party paying it, is still a 
compulsory exchange, for, although such exchange is 
usually unjust or unequal, the fact that it is so is not 
essential to forced exchange, which is a violation of 



TAXATION AS A EEMEDY. 257 

freedom, even should the exchange prove more favor- 
able to the party upon whom it is imposed. 

Adam Smith makes it appear that man is the 
only trading animaL He says, "No one has ever 
known dogs to exchange bones." Doubtless this is 
true; but we often see the bone exchange the dogs. 
This is by a brutal compulsion, in which one dog 
takes the bone from a weaker dog ; and, like the 
taxing power, usually giving or leaving nothing in 
exchange. And yet taxation has no justification in 
ethics or economics, unless it is in equation with 
some service which the taxing power has rendered 
the taxed individual. And however equitable such 
tax might be made to compensate such service, still, 
if it be a service not desired by the individual, but 
which he would prefer to do without, it would still 
be compulsory and hence not compatible with per- 
sonal freedom or with such an exchange as is con- 
templated in economics. The taking of the bone 
from the " under dog '■' would still be the brutal act, 
although it might chance to put him in scent of an 
equally good or even better one. The right of the 
individual and the very fundamental principle of 
economics, which is " The Science of Exchanges," re- 
quires, not merely that the tax shall be equitably 
proportioned to the service which the state or gov- 
ernment has rendered, but that it shall be only for 
such service as the individual has voluntarily ac- 
cepted and made available to his use. The line be- 
tween freedom and despotism is drawn just here. 
The form of government has essentially nothing to do 
with it, except as it may give a greater or lesser facil- 



258 SOCIAL WEALTH. 

ity for disregarding tlie wishes of the taxpayer. The 

POWER OF TAXATION IS THE VERY ESSENCE OF DESPOTISM. 

To the individual who is forced to make the trans- 
fer, there can remain but little in the choice between 
the despotism of an autocracy, an aristocracy, or of 
a democracy. It is a compulsory exchange, and car- 
ries with it all the potencies of all the slaveries. For 
the power to enforce taxation is the power to take 
the earnings of labor and make such return as it 
pleases, or none at all ; a result which chattelism 
hardly ever gave. 

Now, it is to such a questionable power which Mr. 
George and his particular disciples look to right the 
wrongs of labor — and of capital(?). They see no 
way to cease doing the wrongs or prevent their re- 
currence, but have a " sovereign remedy " to apply to 
the mischiefs which the wrongs produce. That is 
found in absolute power of taxation, amounting to 
"confiscation" in respect to "natural rents," and 
which Mr. Clark suggests is not merely a natural 
right of government, but " the higher law of prop- 
erty," and which another disciple has discovered to 
be the " missing link " between the Georgian theory 
and the " divine right." 

More metaphysical than his leader, Mr. Clark de- 
rives this law from the " bounty of nature," at the 
same time chiding Mr. George for using so " inexact 
a cripple as the word ' land ' to convey so vast a 
meaning." 

But Mr. Clark's conclusion, that this " whole ma- 
terial universe outside of man " should properly 
apply to matter transmuted by human powers (and 
why not to those powers themselves ?), as well as to 



TAXATION AS A KEMEDY. 259 

the " raw material and natural forces," is unanswer- 
able ; and whatever is derived therefrom should 
necessarily become subject to taxation or confisca- 
tion, as well as the rent. There is no logical escape 
for Mr. George from this dilemma, which seems only 
half comprehended by his disciple. For the " nat- 
ural?) " profits and interest, as well as the rent, if 
they exist outside of the exercise of forceful or fraud- 
ulent powers, are " unearned increase " and a mal- 
appropriation of " the bounty of nature " which should 
be confiscated or taxed back as the " birthright " of 
the whole people. 

This is plainly the logical conclusion to the major 
and minor propositions, and to stop the short of this is 
to dishonor the theory altogether. 

The truth, however, is that these propositions are 
merely sentimental metaphysics and without the 
least practical importance whatever. If there is a 
" bounty of nature," it is for those who take it. Even 
Mr. Clark's, or rather Mr, Smith's, apothegm that 
the " unconscious is the property of the conscious," 
amounts to this and nothing more. The conscious 
or knowing appropriate that which is unconscious 
or unknowing, and also that which is less con- 
scious or knowing, as men with animals, and supe- 
rior with subject races of mankind. There is noth- 
ing inconsistent in one of these syllogisms with any 
slavery or injustice which the world has ever known. 

With neither Mr. Smith's nor Mr. George's general- 
izations is there anything incompatible in the taking 
of rent, interest, or speculative profits, nor do they so 
much as allow that any escape is possible from these 
acknowledged evils through any " bounty of nature," 



260 SOCIAL WEALTH. 

or any workings of the universe, but only through 
the intervention of some human device like the con- 
fiscation of rent after it has accumulated by natural 
law, or of getting in a " death rate tax " upon what 
nature would otherwise bestow upon the conscious, 
letting the unconscious and the less conscious go un- 
fed and unclothed, and, in fact, devoured. 

This tax or confiscation, then, so far from being in 
accordance with nature, is corrective or subver- 
sive of nature according to the showing of its 
own advocates, and is intended not at all to "com- 
plete economical science," as they claim, but to cor- 
rect nature's blunders. * What neither of them seem 
capable of comprehending is that the civil power to 
collect rent make comjDulsory exchanges and enforce 
unequal contracts is the evil to be abated, and not 
the inability of nature to bestow her bounty as she 
desires, or to effect the equality she intends. 

Mr. Clark parades the great Peripatetic Philoso- 
pher as having given the name " bounty of Nature " 
to the indescribable thing he bases his " higher law 
of property " upon. I think it was the same philos- 
opher who named the, to him, mysterious rising of 
water in a pump, " nature's horror of a vacuum." 
The one definition is as valuable in hydraulics as the 
other is in economics. 

The entire school are simply ignorant of, or else 
affect to ignore, the "law of use," or that the doing and 
enjoying of a use are inseparable in nature. I 

* It was said of the elder Beedier, tliat when spoken to about " The 
Conflict of Ages," written hy a son of his, he expressed a regret, since if 
" the Ahuighty God had got himself into a tight place, he did not 
think Edward could get him out." 



TAXATION AS A REMEDY. 261 

find nature bountiful to me in causing the tree to 
grow which I have planted and cared for, but it is 
bountiful to the grub, who, " conscious " of its " prop- 
erty in the unconscious" tree, proceeds to appro- 
priate it, not by devouring its entire bulk, nor even 
"two per cent.;" but by eating away a little bark 
and sap near the ground, which, hoAvever, girdles and 
destroys a noble fruit-bearing tree to sustain its in- 
significant life for a brief season. Truly nature is 
bountiful to him ! I plant potatoes, squashes, etc., 
and nature co-operates to make them grow with mys- 
terious rapidity ; but the conscious Colorado and the 
Gourd beetle claim their birthright in " the bounty of 
nature," and, in an inattentive hour, I find my plants 
destroyed and hopes of harvest blasted. One is re- 
minded of the answer of the boy whose pious father 
was laboring to impress upon his mind the benefi- 
cence of Providence in bestowing the long bill and 
long and slender legs upon the crane in order that he 
might more successfully prey upon the less conscious 
piscatory tribes, and thus secure a supply of food : 
" Don't you think it rather hard upon the fish ?" 
Natures gives or parts with nothing. She tenders 
uses, but exacts return of every iota of substance she 
intrusts to our care. Her invariable price for its use 
is the labor necessary to avail oneself of its benefits. 
She exacts nor permits rent, interest, or taxation, but 
repudiates them wholly and throws them back upon 
labor invariably whenever presented to her for can- 
cellation. 

Mr. George has saved the critic any necessity of 
applying the reductio ad ahsurdum to his scheme, 
by insinuating that we can tax land, " whether culti- 



262 SOCIAL WEALTH. 

vated or left. waste ; wealth, whether used product- 
ively or unproductively, and laborers whether they 
work or play," although premising at the beginning 
of the paragraph that " all taxes must come from 
the produce of land and labor, since there is no other 
source of wealth than the union of human exertion 
with the material and forces of nature." 

Of all methods and schemes for ameliorating the 
condition of labor, that of "tinkering taxation" is 
the most stupid when not criminal. To abolish tax- 
ation altogether would certainly relieve its burdens. 

A century ago, taxation was regarded as a very neces- 
sary method of sustaining the church and promoting 
religion. A tithe of labor's earnings was considered 
no more than a fair compensation for religious in- 
struction of the people and their guidance in the 
path which led to future felicity. It is not necessary 
to inquire now whether this was an equitable ex- 
change. We know it was mainly a compulsory one, 
and that it was this prerogative to tax the people 
and enforce this compulsory exchange, and not any 
tendency of true religion, which begat the wars and 
persecutions generally known as religious. This 
power, which, for fifteen centuries, was almost un- 
questioned in church or state, is now seen to be the 
most pernicious thing, not even promoting in the 
least the purpose for which it was professed to be 
employed. 

Now, Mr. Clark, to correct nature's mistakes in 
conferring her bounties, proposes to empower the 
state to impose two tithes upon labor, for his two per 
cent, upon all the assets, including land, would amount 
to about twenty per cent, of the yearly production. 



TAXATION AS A REMEDY. 263 

Thus churcli and state might both be endowed to look 
after the material and spiritual interests of mankind, 
giving such return in the compulsory exchange as 
suited the managers of each. This would give one 
in ten for our secular and the same for our religious 
government. With respect to the church, however, 
it is divided into so many sects that there seems no 
way but to make her contributions voluntary, and 
each one pay what he thinks an equivalent for her 
services, and so a free if not wholly an equitable 
exchange. 

But might not the state also deal on the voluntary 
principle ? I think so ; and then each one could have 
the formof gov^ernment he preferred, and pay as dearly 
or as lightly for it as he found to suit his ideas, 
the same as he does in matters of religion, and might 
have free trade, protection, or prohibition, fiat or metal 
money, as he individually preferred. Since taxes can 
be produced only " by the union of human exertion with 
the material and forces of nature," the man should be 
left free to choose the secular guidance and protec- 
tion he thinks best, and obtain it for himself at the 
most reasonable rates, as he now does his religion. 

The graduated tax proposition is much of the same 
nature as the " confiscation of rent " or the " death 
rate" tax. They only vary in detail. They are sim- 
ply endeavors to remedy one " compulsory exchange " 
by instituting another. For that rent, interest, and 
profits are the fruits of enforced exchanges, must be 
regarded as proven. Through usurped dominion of the 
land, class privilege, and private rights created by ar- 
bitrary will, barbaric custom, and chicaneries of 
trade, rendered possible of achievement by " foster- 



264 SOCIAL WEALTH. 

ing legislation "_ and a purblind jurisprudence, labor 
is compelled to part with its natural wages, and 
receive in return whatever capitalism and the govern- 
ment vouchsafe it. This state of things our tax 
reformers do not at all expect to abolish, by taking 
away these arbitrary powers and class privileges, but 
propose to equalize things by another compulsory 
exchange, and so enable the laborers to get sqiiare 
with those who have plundered and overreached them. 
It will not work. 



CHAPTEK XVII. 

REFORMS, NOT REMEDIES. 

In the treatment of diseases of the human body it 
is important to know the real symptoms, and to have 
an understanding of the disease they indicate. This 
is a prerequisite. But a physician may be able to 
determine this with a great deal of accuracy, and yet 
be widely wrong with regard to treatment. He may 
be able even to trace these symptoms to the disease 
and the disease to its inciting cause, and yet fail ut- 
terly — a thing which he is pretty sure to do if 
he has more faith in specifics than he has in estab- 
lishing sanitary conditions. Now this is notably the 
error of labor and economic reformers. They give 
an admirable diagnosis of the derangements of the 
body politic, and trace them directly, at least, to the 
immediate cause. But usually they become infatu- 
ated over some specific remedy. This often, if not 
always, takes the form of some statutory provision or 
positive institution which they feel certain would 
cure the disease. A prohibitory or restrictive law is 
the dream of the reformer who seeks to make the 
world temperate. 

The financial, trade, and labor reformer, each 
seems to expect that the enactment of a law will cure 
the disease which has its source in the fundamental 
civil institution, and can only be eradicated by re- 



266 SOCIAL WEALTH. 

peal and not by passing new statutes. There is a 
singular similarity in the lines of thought pursued 
and in the profitless results which have attended the 
labors of such men. A few illustrations must suffice. 
Henry C. Carey pointed out with great clearness some 
of the leading fallacies of the two schools of econom- 
ics in ignoring industry. In this respect his treat- 
ment of the subject of trade was masterly and con- 
vincing, but when he came to his favorite scheme, 
the taxation of the products of the industry of other 
nations, his logic seemed to have failed him. We 
now see how utterly its adoption has failed to relieve 
the evils it was instituted to cure after a quarter of 
a century of high tariffs. 

Edward Kellogg wrote a book on "Labor and 
Other Capital," setting forth in a most pithy and log- 
ical way the evils of interest-taking ; and putting the 
" just rate of interest " upon the only logical basis, 
the cost of making the representative money and of 
keeping it in circulation. But the moment he at- 
tempted to give a remedy his logic ceased to serve 
him, and he put forth a scheme which, if it could 
have been adopted, instead of relieving financial dis- 
tress, would have made a more complete monopoly 
of the money-making power than ever existed before ; 
would greatly have accelerated the monopoly of the 
land, and given the land monopolist a monopoly of 
the curiency also. 

Last we mention Henry George, whose work on 
the monopoly of tlie land is scientific as well as 
scholarly. As far as the diagnosis is concerned it is 
conclusive. Yet, afflicted wit4i a " remedy," he falls 



EEMEDIES — FEEE TEADE IN LAND. 267 

into the most inconsequent deductions and puerile 
speculations. 

We sliall give a cursory review to tliese scliemes, 
but refer to them here merely to show the tendenc}* 
of reformers to be led astray by the idea that some 
contrivance can remedy ills which are deep-seated, if 
not constitutional, and which can only be eradicated 
by recurrence to first principles and correction of the 
fundamental error. 

EEMEDIES — FEEE TEADE IN LAND. 

A school of free-traders, represented by the Cob- 
den Club of England, have given the land question 
marked attention, and appear to have considered 
that the removal of the legal difficulties in the way of 
easy transfer of the possession of the land would 
remedy the evils which they acknowledge to exist in 
regard to land monopoly and the abuses of landlord- 
ism. Accustomed to the exclusive dominion of their 
land by a hereditary class, and to the difficulty of ob- 
taining land in small allotments in consequence of 
the entail of estates, of the complicated legal forms 
and expenses of conveyance, it is naturally imagined 
that relief from these obstructions would greatly fa- 
cilitate the appropriation of the land among those 
who desire and are best fitted to improve it. 

But experience shows that these facilities will 
facilitate the absorption of the land, as well as its 
general improvement, and thus give a wider scope to 
the monopoly it is intended to remedy. No obstacle 
in the United States has ever been interposed to the 
ready transfer of the land. In the older states, it is 



268 SOCIAL WEALTH. 

true, where land has attained fabulous prices, as in 
cities, there are difficulties in transfers, but only 
through onerous legal charges in searching titles and 
in conveyancing ; but, in respect to new lands and in 
the country generally, there are no such expenses ; and 
while the government retains possession of consider- 
able tracts, actual settlers may enter without even 
paying for the land more than the customary cost of 
survey and making of patents. What the " Cobden 
Club " seeks for England, therefore, has, almost from 
the first, been realized in this country. And yet, with 
all our immense acreage of cultivable, timber, and min- 
eral lands, the results of forced competition are taking 
us with rapid strides in the footsteps of the mother 
country. Have we not already passed her in the mad 
race ? Our parvenu millionaires equal her titled mag- 
nates in wealth. Our paupers are quite as numerous 
or promise soon to become so. Our landlords are 
as exacting, our rents are as high, and our tenants 
more submissive. Our landed estates are as practi- 
cally entailed as those in England, and are being 
constantly increased by purchase, and never dimin- 
ished by sale, except by lease on time. The Mosaic 
law is wholly defied and set at naught in buying, to 
which our laws furnish every facility and sanction. 
It is scrupulously observed, however, in selling, and 
none is " sold forever," but only for a week, or a month, 
or a year, seldom for a term of years. Our cities and 
country towns are largely in the possession of such 
estates, and they are all the w^hile increasing in size 
and value more than in numbers. When one is 
broken up, as lia})pens in exceptional cases, the frag- 
ments are soon gathered again by the still larger and 



REMEDIES— FREE TRADE IN LAND. 269 

stronger ones. Some of these estates are older than 
our government, and many are a century old. One of 
the largest, if not the very largest, is regularly en- 
tailed, despite the genius of our institutions, by a 
tradition in no wise confined to that particular familj^, 
by which the holder, while living, deeds the estate to 
his eldest or favorite son, leaving annuities to the 
other children. By this means the valuation of the 
property is avoided, which could not be done if a 
will were made or the property should be left by an 
intestate ; it is thus enabled to escape, in a degree, 
the burdens of taxation. 

So much more favorable to the establishment of large 
estates are our wide domain, our facilities for trans- 
fer and absolute proprietorship, that large numbers 
of capitalists of England and other European coun- 
tries are availing themselves of the opportunities to 
do here what would be quite impracticable for them 
now to do at home, build up large landed estates, and 
where in creasing population and an enterprising spirit 
are sure to mass what economists term the unearned 
increment, but what is substantially the increment eavned 
by unpaid labor. It is estimated that one-sixth of 
the large tracts transferred in our country for the 
last fifteen years have been purchased by English 
capitalists, and a large proportion by othei- foreign- 
ers. To make trade in land free, in the sense of leav- 
ing it unrestricted as to private ownership, can have 
no other tendency than to promote monopoly and ul- 
timately reduce the citizen to the condition of a serf- 
like tenant. 

And yet this remedy is good, in as far as it repeals 
laws which restrict the readv transfers of location and 



270 SOCIAL WEALTH. 

the exchange of the improvements one may have 
made upon the land. The error lies in recognizing 
any title to land but that of occupancy and labor ; for, 
as we have seen, the land is not a subject of exchange, 
as it can form no equation with labor. 

Our constitution, then, as interpreted by our courts 
and legislators, with its opportunities for enterprise 
and general growth and development, still shelters 
and encourages the growth of a subtler power than 
chattelism, which once reclined under its aegis. This 
power is by far more dangerous because it pervades 
every section, overshadows every interest, invades the 
home of every toiler, and bars opportunity to every 
human effort. To make trade in land free, in the 
capitalistic sense, bears the same relation to land 
monopoly that legalizing the slave-trade once did to 
chattel slavery. I quote from Professor J. E. Cairnes 
a paragraph pertinent to this issue : " In a contest 
between vast bodies of people so circumstanced (des- 
titute of land) and the owners of the soil, between the 
purchasers without reserve, constantly increasing in 
numbers, of an indispensable commodity, and the 
monopolist dealers in that commodity — the negotia- 
tion could have but one issue, that of transferring 
to the owners of the soil the whole produce, minus 
what was sufficient to maintain, in the lowest state of 
existence, the race of cultivators. This is what has 
happened wherever the owners of the soil, discarding 
all considerations but those dictated by self-interest, 
have really availed themselves of the full strength of 
their position. It is what has happened under ra- 
pacious governments in Asia ; it is what has hap- 
pened under rapacious landlords in Ireland ; it is 



REMEDIES — FREE TRADE IN LAND. 271 

what now happens under the bourgeois proprietors 
of Flanders ; it is, in short, the inevitable result which 
cannot but happen in the great majority of all so- 
cieties now existing on earth where land is given up 
to be dealt with on commercial principles." 

While the advocates of free trade in land admit 
that it will result in " unequal ownership," it is but 
just to say that they readily acknowledge, a corre- 
sponding duty to labor or to the people disinherited 
by the process to which they give the title of "distri- 
bution of burdens." The necessary sequence of such 
distribution is readily seen ; indeed, has always been 
acknowledged, and hence our poor rate system, our 
almshouses, and " out-door relief." Our education 
in common schools, sustained by a tax on property, 
our governmental support of charities, etc., are in- 
stances of its application. It is only necessary to say 
that so far these distributions, however justified by 
necessity, are far from satisfactory, and for this rea- 
son : With the unequal ownership resulting from 
"unequal opportunity," the burdens, however at- 
tempted to be distributed by governmental interven- 
tion, result in shifting rather than in distributing 
them, so that the burdens, as of taxes in every form, 
fall ultimately upon labor and the industrial produc- 
of the country, never upon the holder of the land or 
upon those who are enabled, by treating land as a 
commodity, to obtain income without service. For 
every item of tax laid upon the land is added to the 
rent ; and profits and interest increase as burdens or 
taxes are laid upon property or upon business of any 
kind. As the merchant only directly pays the duties 
on imported goods, and adds them to the price of his 



272 SOCIAL WEALTH. 

wares, usually with an additional profit upon the 
payment, so the landlord adds his tax to his rent- 
roll and the banker to his discount charge. Through 
every stage this shifting process goes, until it reaches 
the worker, who has nothing but his labor to sell, and 
particularly the agricultural laborer, who, being last 
in the chain, finds it impossible to shift it upon nat- 
ure, as she repudiates the fraudulent subterfuge by 
which it is transmitted from the pretended burden- 
bearer through every avenue of trade and industry, to 
the remotest factor, the laborer. And if the burden 
has become too great to bear he is crushed by it, for 
he cannot shift it farther or escape it in any way. 
The land, not being movable, cannot be transferred ; 
hence only possession or occupancy can be exchanged. 
Being no product of labor, it cannot be measured by 
labor or have a labor price. A money price is there- 
fore fraudulent. 

Land can form no proper subject of sale, for these, 
among other reasons : 1, It is not a production of hu- 
man labor. 2. It is a heritage of which no one can 
be rightfully deprived, or even divest himself. 3. It 
is limited in amount and cannot respond to demand 
by increased suppl3\ 4. It is not subject to removal, 
and hence cannot be transferred. 5. Ownership is 
limited to occupancy, and consequently ends with 
the abandonment of the location, or with the decease 
of the occupant. 

To all Avhich it is answered, that it is true the land 
cannot be removed, but that property in land is 
merely a right to occupy and receive the fruits of the 
land, " past, present, and to come," "forever." To 
which the simple reply is that rights and duties are 



NATIONALIZATION OF THE LAND. 273 

one and inseparable, that the right to possess and 
use can only inhere with the duty of occupation and 
use. Right inheres in person with the duty, not alone ; 
nor can the duty be done by proxy. The usufruct of 
the soil is due to and goes with the labor. It be- 
longs to the living, not to the dead ; to the working, 
not to the idle. It is, therefore, not burdens which re- 
quire distributing but opportunities, and unless these 
are distributed the burdens cannot be, and the attempt 
will ever result in shifting, not equalizing them. 

While, therefore, this school are entitled to much 
praise for their treatment of the land question, par- 
ticularly for the book " Systems of Land Tenure in 
Various Countries," they have, by no means, solved 
the land problem. To subject land to the law of the 
market, or free trade, can remove no radical evil 
connected with its monopoly. It would be at best 
but a substitute for the feudal law or for the law of the 
stronger. It might, by being complemented by a 
negative proposition, attain to a salutary result in 
promoting the object sought — the increased aggre- 
gate production of the land. This would also dis- 
pense with the cumbersome machinery with which 
the advocates of nationalization propose to accom- 
plish their aims. I refer to the abolition of all laws 
enforcing the collection of rent, and the practical ap- 
plication of the principle of " Misuser " and " Non- 
user," in respect to its occupancy or ownership. 

NATIONALIZATION OF THE LAND. 



Next to Free Trade in land, we may notice the plan 
of the English Land Reformers to make the land na- 
tional property. This is a proposition much more 



274 SOCIAL WEALTH. 

radical than tlie " Cobdeii Club" has ever proposed, 
and is yet more in keeping with the theory of land 
ownership in England, where the system of absolute 
property in land has never been accepted. Under 
the feudal system the rule of " free alienability " only 
applied to personal property. Unlike the Roman 
law, under which a man was the absolute proprietor 
of everything in his possession, including slaves, 
children, and wife, the feudal theory was that abso- 
lute property in the soil vested in the sovereign alone 
as the representative of the nation. " The territory 
belonged to the nation as a body, but the sovereign 
alone exercised all rights over it. Absolute property 
in the soil, either the dominion of the Roman or the 
Allod of the German, is impossible to any private 
person in England " (Macleod, E. E., p. 335). 

To nationalize the land is, therefore, more in ac- 
cordance with their national traditions, and is merely 
for the nation to resume the management of its estate, 
and reform its system of leases to individuals. All 
ownership of the land there is compatible with such 
change. And the only question seems to be as to the 
method of redistributing the possession or occupancy. 
Mr. George is outspoken against any proposition to 
remunerate land holders for the surrender of their 
claims to exact rent and retain control. His reason- 
ings are cogent and convincing, but not conclusive of 
the matter, Avhich will have to be decided by practi- 
cal compromise and not by abstract right. As be- 
tween the land holder and the tenant, the point is 
clear, and the natural right of the cultivator to con- 
trol his field or farm cannot be logically questioned ; 
but the relation of the state to the landlord is such 



NATIONALIZATION OF THE LAND. 275 

that it may justly consider whether, having so long 
"Upheld an outgrown system and been a party to its 
abuses, it may not to some extent modify the effects 
of summary restitution, and bear a portion of the 
burden which may fall upon those who, without fault 
of their own, have been taught to depend upon the 
reception of annual contributions from tenants and 
the accustomed incomes from such privilege. To 
disestablish the system without compensation or 
composition, would be to assume that the landlords 
only are responsible for the system of tenure, under 
which they exercise the rights of property in the soil. 
But this cannot be justly done. Society is a growth 
in which all its members share the responsibility. 
Land tenure was not invented and applied by the 
landlord class. It arose out of the early assumption 
of power by military chieftains and public rulers, 
and grew according to the state of intelligence and 
social development of the people. And although it 
can be traced in instances to unscrupulous usurpa- 
tion, such usurpation became possible only among 
rude and barbarous populations, who worshiped 
brutal power, and servilely aided the forging of their 
own chains. Mr. George draws a parallel between 
the land holders and the former slave-holders of this 
country, and seems to imply that, as the latter were 
not reimbursed for the loss of their slaves, neither 
should the land holders be reimbursed for the loss of 
their revenues by the surrender of their land to gov- 
ernmental control. But the parallel, to be of any 
force, would require that the land holders should re- 
bel against the government which protects them in 
their property in land, as the slave-holders did 



276 SOCIAL WEALTH. 

against the government to which their " institution " 
owed its privilege to exist all. It was the desire of 
a number of antislaverj men, among whom was Ger- 
ritt Smith, to initiate measures for the abolition of 
slavery by purchase, on the ground that the whole 
country was responsible for its existence, the North 
as well as the South, since the former had profited by 
the slave trade, in which it had built uj) many, at the 
time, colossal fortunes, and also had largely shared 
in the commerce and manufactures of the staple pro- 
duction of slave labor. He assisted Judge Grimke, 
of South Carolina, to emancipate his slaves, and 
would have largely contributed to effect so noble a 
work, but his purpose was frowned upon by Abo- 
litionists generally, and was met with resentful de- 
nunciations by the political agitators who claimed to 
represent the South. Had his advice been taken, it 
would have saved the destruction of billions of prop- 
erty and a million of lives, however open to objection 
it might have been in some respects. 

We have another institution valued at say $30,000,- 
000,000, exclusive of improvements, which the stroke 
of a pen could render valueless, without taking 
a dollar from the wealth of our country. Yet, if 
by some compromise which should effectively abolish 
it, bloodshed and years of strife and suffering could 
be avoided, it would be wise to adopt it. I do not 
deem it essential to indorse any particular plan to 
effect the object, as I think it inexpedient to invoke 
legislation to do anything but take itself out of the 
way of social progress ; but I foresee that many at- 
tempts at legislation will be made, in the professed 
interest of reform, and I can express a hope that such 



NATIONALIZATION OF THE LAND. 277 

action will accord with rational policy as well as with 
natural right. 

For England, then, the nationalization of the land 
seems the orderly thing to be done, if the state is to 
continue and government be saved from anarchy. 
The original advocates of this theory favored com- 
pensation of the land holders by the government. 
Mr. Alfred Kussell Wallace, whose " land nationaliza- 
tion" I deeply regret my inability to justly commend, 
or extensively quote as I should desire, advocates 
the retention of the incomes by the landlords for 
their lives, or for two or more lives of persons now 
living. If fault can be found with his plan or reason- 
ing, it is in that he goes too far in the spirit of for- 
bearance and conciliation. Certainly no objection 
can be raised that his proposition is unjust to the 
landlords, or in any way inconsistent with legal tra- 
dition, or wanting in any practical feature. But 
when the land has been assumed by the nation, a 
most important question arises as by what method it 
shall be apportioned or redistributed. Mr. Wallace 
does not propose that the government shall become 
a superintendent of cultivation and use. He says 
that " no state management will be required, with its 
inevitable evils of patronage, waste, and favoritism." 

He has adopted a phrase, if not invented it, which 
expresses to me the true relation of man to the soil. 
It is " occupying ownership," and which I will allow 
him to define in his own words : " Ownership of land 
must not be the same as that of other property, as, if 
so, occupying ownership (which alone is beneficial) 
would not be universally secured. A person must 
own land only so long as he occupies it personally ; 



278 SOCIAL WEALTH. 

that is, he must be a perpetual Jiolder of the land, 
not its absolute owner ; and this implies some supe- 
rior of whom he holds it. We thus come back to 
that feudal principle (which in theory still exists) 
that everyone must hold his land from the state, 
subject to whatever general laws and regulations are 
made for all land so held " (p. 193). 

I can only give place farther to his summary of 
the " necessary requirements of a complete solution 
of the land problem as enunciated in these pages." 

(1) " Landlordism must be replaced by occupying 
ownership." 

(2) " Tenure of the holder of the land must be 
secure and permanent, and nothing must be per- 
mitted to interfere with his free use of the land, or 
his certainty of his reaping all the fruits of any labor 
he may bestow upon it." 

(3) " Every British subject may secure a portion 
of land for personal occupation." 

(4) " All suitable tracts of uninclosed and waste 
lands must (under certain limitations) be open to 
cultivation by occupying owners." 

(5) " The freest sale and transfer of every holder's 
interest in his land must be secured." 

(6) " Subletting must be absolutely prohibited, and 
mortgages strictly limited " (p. 192). 

Mr. Wallace distinguishes between the value of 
land which is made up of what he terms " the in- 
herent value," and the additions to such value made 
"by the labor or outlay of the owners or occupiers." 
The inherent value, he thinks, " may conveniently be- 
come the property of the state, which may be remu- 
nerated by payment of a perpetual quit rent." 



NATIONALIZATION OF THE LAND. 279 

Greatly as I am disposed to follow up these quo- 
tations by other extracts, it is diverging from the 
purpose of this essay to do so; for the reader must 
have discovered that in his remedy Mr. Wallace has 
laid aside the mantle of the patient investigator, 
which he usually wears, and assumed the garb of the 
legislator ; and instead of stating what is in the nat- 
ural relation of "man and the soil," dogmatizes of 
what must be. This is the more unfortunate since, in 
most instances, there seems no need of it. His plan 
for legislating occupying ownership is wholly unnec- 
essary, as, in the absence of statutory enactments, 
that is necessarily the extent of ownership, and the 
enunciation of a natural principle of ownership is far 
better than any advocacy of a law regarding it can be. 

In this phrase and plan, however, Mr. Wallace has 
embodied fully the idea put forth a half a century 
ago by Spence, Douglas, Evans, VanAmringe, Hunt, 
Hine, Duganne, Windt, Masquerier, Devyr, and 
others, viz. : Limitation to Property in Land. It is 
true that they, like Mr. Wallace and Mr. George, de- 
pended on legislation to make good their just and 
humanitary conceptions, and it seemed an arbitrary- 
thing to do to " make a law " restricting one in the 
extent he should follow his inclination to " occupy 
the land." But in the light of more recent investi- 
gations into the rise and origin of property in laud, 
and its essential nature, it is seen that it has its nat- 
ural limitations, and that it is only necessary for legis- 
lation to undo what it has done to bestow false rights 
and to subject men and things to unnatural and 
therefore unscientific categories to promote distribu- 
tive justice. 



280 SOCIAL WEALTH. * 

The tendency of advanced tliouglit for many years 
has been to the scientific method, and to place less re- 
liance upon the empiricism which finds its way into 
political platforms or becomes petrified in legal form 
and enactments. The land and labor reformers have, 
to an extent, shared in this advancement, and although 
many still fruitlessly follow the ignis-foiuus which 
holds out the hope of legislating justice into human 
relations and rectifying wrong by use of the ballot, 
the more thoughtful see that only by exact knowledge 
of the elements of industrial economy can they even 
be prepared to ask, much less to enforce, the sim- 
plest equities. 

To nationalize the land in the sense of Mr. Wallace 
would be a very different thing in its effect upon 
labor from that advocated by Mr. George and the 
. other and earlier English reformers. Without the 
principle of occupation in ownership, a system of 
leases from the government, open to competition, and 
unlimited in extent, would result no Avay differ- 
ent from the present system of deeds allodial or in 
fee simple. In fact, it would greatly enhance the 
power of capitalism to engross the control of the 
land, since it would relieve it of the necessity of ap- 
plying large amounts in purchasing the land which 
it could secure the same control of by lease. 

In reviewing land nationalization, the author of 
"Progress and Poverty" cannot be overlooked, for 
we should not be justified in refusing to pay tribute 
to his genius and the wonderfully lucid diagnosis of 
the social disorder he has given us, however we may 
question the efiicacy of the specific nostrum he has 
compounded for a remedy. He has, I think, indu- 



NATIONALIZATION OF THE LAND. 281 

bitably proved that " the ownership of land is the 
great fundamental fact which ultimately determines 
the social, the political, and consequently the intel- 
lectual and moral condition of a people." 

But his remedy is the English idea of nationaliza- 
tion, plus the confiscation of rent, minus the fixity of 
tenure, and limitation by " occupying ownership," so 
happily blended in Mr. Wallace's proposition.'^ 

Mankind have no experience which justifies the 



* Although Mr. George has justly placed land ownership at the base 
of tlie social and industrial fabric, he has utterly failed to apprehend its 
relative magnitude as compared with the other forms of usurpation 
which have grown out of it, and he is wholly mistaken as to its increas- 
ing power of absorption over capitalistic increase, as we have seen in 
comparing rent and interest. Their rate is the same, or nearly so. But 
the amounts drawn from the wages of labor are constantly increasing 
on the side of capitahsm. Indeed, all the rent of the land is often taxed 
away by the man of money who has a mortgage upon the premises. A 
considerable part of the tribute paid ostensibly for the use of the land is 
merely for the use of the money to purchase with or to carry on the 
farm. In times long gone by the great incomes were nearly all from 
the land. Now, and the proportion is constantly increasing, they are 
more largely derived from trade, manufactures, and transportation. 
M. de Laveleye notes this error, and says: "The value of capital en- 
gaged in industrial enterprises exceeds that of land itself, and its power 
of accumulation is far greater than that of ground rents. The immense 
fortunes amassed so rapidly in the United States, like those of Mr. Gould 
and Mr. Vanderbilt, were the results of railway speculation, and not of 
the greater value of land. We see, then, that the increase of profits 
and of interest takes a much larger proportion of the total value of labor, 
and is a more general and powerfuLcause of inequality than the increase 
of rent." 

And yet the monopoly of the land is the principal basis on which all 
of these schemes to derive profits depend. Without a power to monop- 
olize the coal lands, our coal monopolies could not exist as now. And 
neither could the transportation monopolies thrive without private con- 
trol of the road-bed and of the termini. The power of the landlord, the 



282 SOCIAL WEALTH. 

conclusion that taxing back land values will reduce 
them, or work any such result as Mr. George as- 
sumes. The value of land depends wholly upon the 
power to monopolize it, and when such monopoly is 
complete, its value embraces the entire product of the 
labor applied to it, minus the necessary amount required 
to keep the stock of labor supplied ; and until this limit 
is reached no taxation can destroy it or seriously 
weaken the monopoly. It would tend to discourage 
rather than promote the general desire to possess 
land, while the increased hazard of retaining it would 
render the success of the bold and unscruplous more 
certain. The history of taxation in all times shows 
that speculation follows the channels of trade most 
beset with obstructions, and avoids those which are 
most open to free competition. The very opposite, 
therefore, of the assumed result, would most proba- 
bly take place, and the wealthy and adventurous 
would continue to absorb the possession of the land 
and have all the more exclusive control from the 
magnitude of the taxes they paid, and to which the 
poor or timid worker could offer no serious competi- 
tion. The successful capitalist would then, as now, 
be able to shift the tax to shoulders of toil, plus the 
profits upon the capital necessary to meet his dues 
to the government, until the utmost limit of endur- 
ance on the part of labor had been reached. 

It would greatly augment and promote the reign 

capitalist, and the state to tax and oppress labor coincide in aim, and 
generally in measures, and though tliey may sometimes wrangle with 
each other as to the division of tlie .'spoils and the responsibility for hia 
ruin, they are united in regarding the laborer as a just subject to be de- 
luded and plundered. 



NATIONALIZATION OF THE LAND. 283 

of capitalism and displace the independeBt worker 
who now cultivates his own acres, but who would be 
then unable to compete with organized capital,, em- 
ploying machinery and every facility which ready 
means would yield, and would be compelled to give 
up his holding and sink into the ranks of the prole- 
tariat. And yet he might survive long enough to 
greatly exhaust the soil, make bare the forests, and 
reduce the productive power of the land, driven by 
his necessities for immediate returns to meet the 
competition rent, which the bidding of the well-fixed 
capitalist would cause to be steadily raised, and to 
pay interest on means to prolong the hopeless strug- 
gle. 

With us, land holding is but the fulcrum of the 
capitalistic lever, which is applied against minor 
land holders as well as against labor and every pro- 
fession and pursuit. Mr. George's plan is really the 
one in vogue to-day, which taxes through govern- 
ment rates and interest to capital the whole value of 
the land as he proposes. Thus, if a man have a 
house and lot, it is taxed by the state or county, the 
corporation if in a city or corporate village, so that 
if he is owing a considerable part of its value on 
bond and mortgage, he will really have about the 
same rent to pay as if he hired from the principal 
landlord of the place, who generally has things "fixed" 
with the assessors. And having no mortgage on his 
premises, he is satisfied with a moderate interest on 
his investment. Thus, in our cities, the small pro- 
prietors are constantly being sold out for taxes and 
for foreclosures. Sale of land for taxes is of quite an 
ordinary occurrence in the most populous cities, as 



284 



SOCIAL WEALTH. 



in the uninliabited districts not occasionally, but con- 
stantly from year to year. In some cities, as notably 
in Jersey City and Elizabeth in New Jersey, and in 
many others all over the country, taxes have so in- 
creased as to leave the holder no recourse but to give 
up his land whenever pressed for payment of mort- 
gages of small amounts. 

As an illustration of the above points, I refer to a 
communication in the Democrat and Glironide, of 
Eochester, N. Y., of Feb. 11, 1885. The owner, who 
claims to have been a working man and to have laid 
tlie basis for his possessions by hard work, attempts 
to combat the idea that rents are too high and that 
taxes are paid by labor, to prove wliicli he makes the 
statement of particulars below : 



TAXES AND NECESSARY OUTLAYS FOR 1884. 



11,326 41 
5,153 32 
2,337 29 
7.000 00 
2,363 93 



County Tax $101 74 

City " 447 64 

Sprinklinp: Streets 15 00 
Central Bridge Tax 12 86 

Water Tax 16 74 

No. av. Improvem't 378 00 

Sidewalks 18 00 

Sewer 3 77 

Repairs 74 13 

Insurance 119 00 

Privies Cleaning. . 22 20 



Total, $1,209 08 Total, $28,180 95 



RENTS. 



170 & 172 Ex- 
change St. . .$365 00 

1 68 Exchange St 372 00 

171 " 208 00 
108 North av. 500 00 

172 & 174 Onta- 
rio St 300 00 



To'al, 1,745 90 
Less Taxes and 
Expenses $1,209 00 



Leav'g net rent $535 92 



This is considerably less than two per cent, for 
money invested and nothing for time and trouble of 
owner, and, as he says, he may sometimes fail to col- 



NATIONALIZATION OF THE LAND. 285 

lect a portion of his rent. Now, if on this more than 
twenty-eight thousand dollars' worth of property he 
had had a mortgage of ten thousand, which is a mod- 
erate average proportion on mortgaged premises in 
general, at six per cent, interest, he would be unable 
to pay the interest from his rent by more than sixty 
dollars, and thus become indebted to the capitalist, 
whom Mr. George supposes is equally wronged with 
the laborer, by private property in land. How is it . 
possible not to see that property in land is so far 
from interfering with the power of capital to lay labor 
under tribute that it is but its chief instrument in 
effecting the spoil of industry ? 

Although this owner fails to make good his asser- 
tion that somebody besides the laborer pays the 
taxes, since, if they had not paid his rent, he would 
have had to pay the taxes out of his capital, which 
he claims he produced by his labor, he justly, as well 
as naturally, complains that his property is being 
confiscated by the "taxing power." 

He avers what is also declared in almost all locali- 
ties, even by our legislative reports, that small prop- 
erty holders are assessed much higher in proportion 
than large estates, and thinks " if the system of tax- 
ation continues, all small freeholders will be made 
paupers, since they will be sold out to pay taxes." 
In fact, this process is, and always has been, going 
on. At certain times and places it becomes more 
conspicuous, as in those to which we have referred, 
but that is its normal, not its exceptional, manifesta- 
tion which steadily extends the jDower of taxing la- 
bor, both by the government and by the capitalist. 



CHAPTEE XYin. 

SUGGESTIONS TO LEGISLATORS. 

Although occupying radical ground in respect to 
the origin and functions of government, I neverthe- 
less foresee that in the condition of the popular 
mind, uneducated and unthinking as it is on the 
great vital questions of social and civil science, it is 
likely in most civilized countries to remain without 
radical change for some time to come. Mere forms, 
indeed, may change, but without any essential im- 
provement. France, under a republic, is scarcely 
less the victim of a capitalistic rule than when under 
the monarchy or empire. In the United States 
there are many respects in which human rights and 
interests are more exposed to legalized spoliation 
than in England. Our tenure of land has wrought 
as great disparities in a century with all our vast 
domain, as a thousand years of feudal and monarch- 
ical institutions in thickly populated Europe. But 
it will be long ere our people will outgrow the child- 
ish civil and legal superstitions through which the 
rule of mammon is sustained and kept dominant. 

In pointing out some of the ways and means in 
which government may aid the cause of science and 
of justice, if I have not the hope that it will be directly 
effective to the desired end, I do hope that by sug- 
gesting to the people what the government might do, 



SUGGESTIONS TO LEGISLATORS. 287 

it will call tlieir attention to wliat it actually is doing 
to keep them in ignorant dependence and want, and 
have the effect to weaken the bonds by which they 
are held in thraldom, and prepare them to dispense 
with such expensive luxuries as are the systems 
which can do nothing for the worker, while providing 
every facility to the Shylocks, the gamblers, and pub- 
lic plunderers to ply their trade. 

It may serve the purpose, at any rate, of indicating 
in a popular way the course in which industrial re- 
form is likely to be developed, with or without the 
aid of ordinary legislation : 

First. By repealing all laws in regard to land 
ownership, leaving " occupancy and use " as it was 
originally, the only title to land."^ To do this while 
laws are still in some degree respected, will have a 
tendency to assure the common mind in its reliance 
upon " statutory provisions ;" but it will at the same 
time greatly encourage self-reliance and self-help, 
and tend to the equalization of possessions and the 
more exact remuneration of labor. Being a peaceful 
and civil reparation, it would doubtless take a com- 
promising or graduated form, something like that 
recommended by Mr. Wallace in his scheme of na- 
tionalization ; that is, by a prospective application 



*It has been said that "possession is nine points of the law." 
Now, if all statut?/ laws in regard to land were abrogated, possession 
or occupation would constitute the ten points, and the natural law of 
property become the onlj^ one. To dispossess or evict one from his 
home and the soil he has improved and enriclied, would then cease 
to be a private right and become a crime, because a forceful assault 
and outrage, as well as the fraudulent and wrongful takmg wliich it 
now is. 



288 SOCIAL WEALTH. 

in its operation — those in present legal possession 
of land to remain so during life or for a certain term 
of years ; but no titles created or derived subsequent 
to sucb change to extend beyond strict occupancy and 
use. This would work no summary change, only a 
gradual one, and to which no reasonable objection 
could be made, since no one would be dispossessed 
of any right he now enjoys, but be only denied the 
privilege of acquiring rights hereafter which are 
detrimental to the enjoyment of the natural rights of 
others, and to the public welfare. If anyone would 
be justified in complaining, it would be the disin- 
herited worker who, having all his life been kept out 
of his inheritance, should have it returned to him, 
not only without delay, but with restitution for past 
wrong. But the truth is, that he or his class are to 
a certain extent responsible for this wrong, for to 
submit to injustice is wrong as well as to inflict it. 
Moreover, if the disinherited class were informed of 
their rights, and disposed to enforce them, each dis- 
inherited person could at once have his proper allot- 
ment of land, abundant for the exercise of his labor 
and the sustenance of himself and family. 

But nothing seems more certain than that, if at 
present a part of the workers should assert their 
natural right to " occupy the land," they would be 
evicted, or driven off at the point of the bayonet by 
the other part — the landless, homeless hirelings of a cjov- 
ernment, run in the interest of the landlord and cap- 
italist. The instances where settlers upon the jDublic 
lands, in good faith and in accordance with the 
statutory provisions, liave been thus evicted at the 
instance of railroad corporations or other magnates 



SUGGESTIONS TO LEGISLATORS. 289 

are too recent and too exasperating to be detailed with 
composure ; but they show Avhat conditions exist, and 
how hopeless is the prospect of any salutary reform 
being accomplished except through the enlighten- 
ment of the people in respect to the nature of man's 
relation to the sources of wealth, and to the product 
which his activity has created. It shows how requi- 
site is the knowledge of what social duty and honesty 
require of all, and also how desperate and fruitless 
all attempts at summary and violent redress of griev- 
ances must ever prove, until those who are to be 
benefited comprehend the nature of their grievances 
and the intelligent methods of securing their re- 
moval.* 

It seems necessary to meet some objections from a 
source which we ought not to have expected. The 
advocates of land nationalization, or rather those who 
seek through taxation to rectify the injustice of land 
impropriation, profess to see a formidable difficulty 
in the plan of Mr. Evans for land limitation. They 
urge (1) that if land is allowed to be private property 
at all, it must be absolute, and hence not subject to 
limitation ; (2) that many do not want land, and there- 

*Tlie proletariat, in the last analysis, is the only one who really 
stands between the worker and his natural right to land, and the just 
remuneration of liis toil, because the ultimate resort is to physical 
force. When " baj^onets think," and the soldier fraternizes with the 
pooi^le, then comes the end of monarch}"^ and of all arbitrary power. 
"When the troops, ordered out at the behests of the corporation kings, 
refuse to fire upon their own class, disputes between employer and 
employed will be submitted to rational arbitration. And when work- 
ingmen refuse to waste tlieir force in voting the kept solicitors of 
capital into places of power and profit, tliere will be more attention 
paid to their rights by those who seek office. 



290 SOCIAL WEALTH. 

fore an equal division is impracticable ; (3) that if 
that land conld be equally divided, it would soon fall 
again into a few hands; (4) and that to establish 
"peasant proprietorship" and small allotments 
would tend to lessen production and to increase, 
rather than diminish, the evils of landlordism, since 
it has been found that in France, Belgium, etc., 
where subdivision has been carried to an extreme, 
the practice of rack or competition rent is more com- 
mon than in England, or even in Ireland. 

Now, each and every one of these objections proves, 
mainly, that it is vastly more easy to ignore than to 
answer a rational proposition, and to refute a fallacy 
set up by one's self than to meet the reasoning of an 
opponent. 

As to the first, nothing is better known to the 
student of the land question and its history than that 
property in land has assumed a great variety of 
forms. That which comes nearest to being absolute 
was the Roman (Jo)ui)iiuni, to which ours corresponds, 
although with us the question of its extent has never 
been challenged, as it ever was by the spirit of 
Roman jurisprudence. For originally it was abso- 
lute only to the extent of the domiciUmm, and tlie 
domain occupied by the family including slaves; and 
the agrarian laws were compatible, not in conflict 
with it. It was the increase in the slaves, and nec- 
essarily in estates to sustain them, that led to the 
great possessions of the rich patricians, which ulti- 
mately ruined Rome. It was by their intrigue and 
usurpation that the agrarian laws were rendered in- 
effectual. It is thus seen that the only absolute 
form of property in land ever known was consistent 



SUGGESTIONS TO LEGISLATORS. 291 

witb. a " limitation of estates." The " Laws of Na- 
tions " recognize tlie right of prohibiting the sale of 
land to foreigners. The right of a nation itself over 
the land is confined to its carefully traced and 
guarded boundaries. It is war to seek their exten- 
sion. But there are many forms of property in land. 
It is impossible, under any system of law, to occupy 
any portion of land without having property in it. 
In England, where the " Allodial " form does not 
exist, there are " tenants in fee simple, the uttermost 
degree of estate in land ;" " tenants for life ;" " ten- 
ants by copy ;" " tenants for a term of years ;" " joint 
tenants in common," and " tenants by grand ser- 
geantry," all of which involve " property rights," and 
even tenants at will have a property in the land, 
which may be determined and disposed of.* 

To say that the state caunot prevent the dispos- 
sessing and destroying of its people, is merely saying 
it has abdicated to (Capitalism. 

The second objection, that all men do not want land, 
is false and therefore fails. Every individual needs a 
place to live and work in. In this respect our wants 
are nearly equal. The artist, teacher, trader, and fol- 
lower of an}^ trade or profession not only require place 
but as great a proportion of the products of the land 

* " The first thing the student has to do is to get rid of the idea 
of absokite ownership. Such an idea is quite unknown to EngUsh 
law! No man is in law the absokite owner of lands. He can only 
hold an estate in them." — Joshua Williams: "The Law of Eeal 
Property." 

"So far is the private ownership of an object from being incon- 
sistent with the use whicli the owner makes of it being limited, that 
it is precisely tlie limitation on tlie use of such objects that make up 
the substance of more than half the laws of the world."— Mallock. 



.292 SOCIAL WEALTH. 

as the cultivator liimself, and these he usually obtains 
without returning to the cultivator a disproportion- 
ate service. It is sheer blindness, then, which pre- 
vents his seeing that it is of equal interest to himself 
and to the cultivator that the latter should have per- 
fect freedom to produce those necessaries from the 
soil without let or hindrance, and without exaction 
or tribute of any kind. And until this fact is made 
plain to the workingmen, their agitation is not likely 
to prove anything but a disturbing cause, fruitless in 
any practical or beneficial result. 

The third objection is the weakest of all. Even if 
true, it is no reason Avhy redistribution should not take 
place, as, indeed, history shows it has been done re- 
peatedly, and will continue, peaceably or violently, 
until some such principle shall be recognized and ap- 
plied as that proposed, so as to render hereafter 
such reabsorption impossible. The limit to property 
in human bein^^s, now placed within the person of the 
being liimself, renders it impossible for another to 
own him. So the limit ^o property in land being left 
where nature has placed it in that extent which the 
person can touch and move in the direction of pro- 
duction, places the question of its monopoly or mal- 
appropriation beyond all cavil or controversy. 

A word merely is required in respect to the rack- 
rent propensities of small proprietors. It is per- 
haps true, since a man with a few dollars to lend 
usually wants a higher rate of interest than the large 
banker is willing to take. But this fact proves also 
that the land even in Flanders is still largely monop- 
olized and that men cannot obtain it to cultivate 
without tribute, or find other labor to perform which 



SUGGESTIONS TO LEGISLA.TOES. 293 

■will pay better than cultivating tlie land at tlie com- 
petition rent. It proves also that with the greater 
subdivision of the land there is greater ability to pay 
a high rent than where the land is in a few hands, as 
in Ireland, because there is a better field for indus- 
try and a wider opportunity for diversified employ- 
ment. 

A writer in the Contemporary Revieio, referred to 
by Mr. Wallace, attempts to prove the absurdity of 
minute division of the land by showing that if every 
man and woman over twenty years of age should 
claim their five acres, there would not be agricultural 
land enough in England to supply them. Mr. Wal- 
lace patiently explains to him that a great proportion 
of the peoj)le want only enough land for a house and 
garden, not five acres, nor one, and that usually one 
man and one woman would occupy that ; that the 
majority would usually prefer their house site on 
land other than good agricultural land. But the utter 
absurdity of the objection consists in assuming, as it 
logically does, that the proportion of the people to 
live upon and be supported from the land would be 
changed by the greater subdivision, and that what 
was adequate to their wants under a division so ex- 
tremely unequal and unjust as the present, should be- 
come wholly inadequate under a more equal and just 
one. 

But it by no means follows, because ownership 
of the soil should be more equitably distributed, that 
therefore industry in its cultivation shoiild become 
less social. It woiild hardly be possible for it to be- 
come more isolated than at present. It is inequality 
and injustice which isolate and estrange mankind, so 



294 SOCIAL WEALTH. 

that while people may work in the same field or fac- 
tory they have no community of interest, indeed, no 
interest whatever in what they do but only in the sti- 
pend which they receive. 

With an equality of ownership, by which it is not 
necessary to understand an arbitrary equality of di- 
vision, there would be every inducement to co-oper- 
ate, and by concert and concentration of effort to 
effect purposes which, by isolated labor, it would be 
impossible to accomplish. I know of but one thing 
which could prevent extensively organized co-opera- 
tion, and that would be the disposition of a portion 
to get the benefits without the sacrifice of the com- 
bined labor. 

Nothing but this, or apprehension of it, could then, 
or does now, prevent people from deriving all the 
benefits of associated industry and of mutual and 
equitable exchange. Honesty is the mean between 
the rapacity on the one hand and the blind charity on 
the other, which reduces to poverty and then seeks 
temporarily to relieve it. 

The co-operation and organization found to be 
based upon well-established principles would be 
sure to be followed, were the obstacles to their real- 
ization removed. And yet, every freedom to meet 
individual preferences, so as to combine or work in 
isolation as one may choose, would be retained ; and 
the goods of society would not be diminished, or 
social order imperiled thereby, because the indi- 
vidual industry would be subject to equitable ex- 
change, and the one choosing the solitary life and 
labor would do so at his own expense. All things 
are subject to the laws of growth, and industrial as- 



SUGGESTIONS TO LEGISLATORS. 295 

sociation will develop only as the conditions are 
supplied. Equity and liberty are the very first 
essentials to its existence. 

In addition to repeal of laws in respect to land 
tenure, such as we have suggested, such laws as dis- 
criminate against the worker may be repealed, and 
the natural ownership of the worker in what he has 
produced be allowed to have its operation. Nearly 
every extensive enterprise in the country is the 
creature of statute law. Charters, " acts of incor- 
poration," subsidies, especial privileges, are the 
means by which some are enabled to thrive and 
prey upon the public. These all should, and will in 
time, be put an end to ; but while they are allowed 
to exist, it would at least be a measure of justice, 
though a meager one, to direct that such corpora- 
tions should pay labor by an eight-hour standard ; 
that in addition they should credit each employee 
with a share of stock corresponding to the nature of 
his employment, risk to health and life, etc., so 
that he would not only have a title to his wages, 
but to a share of the dividends. I am not advocating 
this as an abstract principle, but merely suggesting 
it as one of-the means by which an equitable method 
may be approximated and gradually attained, if there 
is such a disposition on the part of capitalists or of 
the legislature. 

Upon their own grounds, capitalists cannot object 
to such modifications. Their claim to compensation 
for the money or the labor they have invested would 
be strengthened, not imperiled, by acknowledging 
the investment which the workman has made. They 
say : " We have put so much money into this mine ; 



296 SOCIAL WEALTH. 

we liave furnislied the machinery — have paid the 
wages. The laborer has wrought, to be sure, but ho 
has received weekly his wages, upon which he might 
get rich, if he would be industrious and frugal as wo 
were when we were laying the foundations of our 
fortunes. We have all the risks to run, even to get- 
ting back the money we have paid in wages. The 
property is ours, and the fruits of it belong to us." 
Let us see. The business has been a profitable one, 
or you would not have pursued it. The money you 
put into it has been taken out of it several times 
over, while the worker has only been paid back as 
much as he put in, granting his wages to be fair. 
Has he run no risk? Has he not every day imper- 
iled his life to look after your property and earn 
your income ? How often have you had explosions, 
inundations, caving and breaking of machinery, etc., 
by which life has been destroyed or greatly imper- 
iled? If a profit on your investment is just, how 
can you deny his claim? If he is to be deemed paid 
when the labor he has put into the work is paid back 
to him, how can you claim more after what j-ou put 
^ in has been returned to you? If he is entitled to no 
payment for risk of loss of life and the stock of cap- 
ital he put in — his labor — -how are you entitled to 
payment for risking your capital in the same enter- 
prise ? But you say, " He was not a stockholder, 
and so not entitled." But he was your industrial 
partner, without which there would have been no 
production, and all 5^our investments would have 
gone to waste. To the treasure within the mine 
your title was no better than his — not so good, if he 
labored in bringing it to the surface, and you did not. 



SUGGESTIONS TO LEGISLATORS. 297 

"But lie agreed for so mucli wages to do the work 
for me, and hence by contract abdicated all claim to 
ownership in the thing produced or mined." But 
this is just the point at which government has doubly 
failed in its duty, if it has one. It has allowed you 
to assume exclusive ownership of the mine, which 
was a usurpation, since it belonged to the people, 
and it then protects you in the enforcement of a con- 
tract you made with the worker under such unlawful 
exclusion, and without informing him what his nat- 
ural rights were, either in respect to the mine or to 
the results of his labor. The contract is therefore 
doubly void, and his claim is unaffected. 

Now, it is just as easy to recognize the rights of 
labor in any enterprise as to define those of wealth. 
The principle of partnership in production by all 
who join in the labor is so plain that no reason can 
be given why it should not be adjudged the control- 
ling law, whenever the question of division is raised. 
Especially in all corporations working under general 
or special laws, it may be required of them to make 
division in accordance therewith. Workers can be 
permitted to draw weekly or monthly allowances, 
which will be charged to them as to members of a 
firm, and adjusted at the annual or other periodic 
division. 

In the absence of any governmental change, in its 
servile subjection to capitalism, what shall hinder 
organizations of industrial and social movements 
upon principles of natural right and equity ? If, ac- 
cording to the philosophy of Comte, it is important 
to "moralize wf alth," in what more important j^oint 
can the beginning be made than in "dealing justly?" 



298 SOCIAL WEALTH. 

How become moral without ceasing " to steal ?" If 
it is to include only the adoption of means of relief 
and of charity, and to " distribute the burdens '' 
which fall with such crushing weight upon the poor, 
it may be replied that its morality is already exces- 
sive. Behold the infinite schemes of charity and of 
benevolent intent? They are only impotent for 
good because they are complementary to spoliation 
and can never enable the plundered to regain their 
loss, while encouraging mendicancy on the part of the 
shiftless and improvident. Progress by such means 
is not only too expensive socially, but becomes at last 
impossible. Just measure, and not alms, is what the 
toiling poor require. To make wealth moral is to 
restore it to its rightful owner, not in alms doled out 
of withheld wages, but by ceasing to defraud the 
worker of his earnings. 

What, however, the holder of wealth can do to 
remedy the evil to which he has contributed — since 
the diversity of interests from which his wealth 
has been derived may render it difficult for him 
to determine with precision from whom it has been 
wrested, and in what proportion — is to begin some 
business or industry which will require emploj^meut 
for a number of people, joining his own industry 
with theirs, if desirable, and, after making suitable 
provision for assuring the conservation of the plant, 
and the inevitable charges against the enterprise, 
provide for the distribution or rather division of the 
products of their joint labors as the principle of 
partnership requires, labor performed being the only 
basis of division. 

By pursuing this course the management might be 



SUGGESTIONS TO LEGISLATORS. 299 

kept in tlie hands of the inaugurator until he was 
satisfied as to the practicability of sharing the control 
with his co-workers ; but his legal control of it need 
not necessarily prevent his dealing honestly with 
them. 

The great difficulty in realizing any true system of 
division lies largely in the habits and prejudices of 
the workers themselves. The elevation of others 
above them as employers, bosses, or foremen has ac- 
customed them to look up with desire to positions 
which might give them power over others and the 
ability to reap gains from others' toil. 

It seems to me most probable that the exact 
method of division will not first appear in a union of 
workingmen, or of a co-operative organization of la- 
bor and capital, but in the enterprise of some indi- 
vidual who will be able to carry it forward and choose 
his partners in the work and in the division. Such 
a one may or may not prove a " great captain of in- 
dustry," but he will prove a leader and deliverer of 
humanity from the thraldom of its needless bondage. 
Surely the century which has seen a Girard, an Owen, 
a Peabody, a Smith, a Peter Cooper, and others who 
have devoted wealth and time to promote human 
welfare and reverse the conditions flowing from the 
iniquities of our civil and economic systems, ought 
not to pass away without producing one man of 
wealth who would be willing, in the interests of 
human industry, to apply his means in demonstrating 
a social and economic problem, the possibility of 
men dealing honestly with each other in production 
and division. 

If I cherish less hope in respect to the immediate 



300 SOCIAL WEALTH. 

realization of some labor co-operative movement of 
equal exactness and comprehensiveness, it is in the 
discouragement which must accompany the tedious 
accumulation of sufficient means by isolated labor to 
establish a movement of sufficient magnitude to at- 
tract attention. The habit of the wage worker of 
depending on the labor of the day for supplying the 
day's necessities, and of consuming in anticipation the 
fruits of his labor, is unfavorable to any prolonged 
self-denial and the patient waiting of those who 
would reap the whole result of their toil. 



CHAPTEE XIX. 



CONCLUSION. 



Without having exhausted, or even comprehen- 
sively stated, the problem of social industry and 
social wealth in all their bearings, I find myself at 
the termination of my effort disposed to review the 
field of labor and summarize the positions and de- 
ductions arrived at in the course of the investigation. 
And first, it has been shown that " the land is the 
common inheritance of mankind," and that this 
" common tenancy " is the form of ownership to 
which the land systems of all peoples, at least of the 
Aryan race, can be traced. That in detaching the 
several from the common right, opportunity was 
given for the assumption of individual or govern- 
mental control, as where the title was assumed to be 
in the head of the state, manor, or even village. 
That under barbaric war, and the subjection of the 
weak to the strong, usurpation, often from violence 
as well as from the hoary abuse in the management 
of public trusts, developed the power of one man, or 
of one class, over the common domain, to the disin- 
heritance of others- 

It likewise appears that ownership in severalty 
was a foregone conclusion as soon as progress 
through separate property in movables began. To 
the primitive Communist this was no doubt a subject 



302 SOCIAL WEALTH. 

of deep regret and apprehension. But improvement 
in social life would have been impossible without it. 
What we are just beginning to see is that in taking 
this advanced step, and through the ignorance and 
inexperience of mankind at that epoch, the mon- 
strous assumptions of dominion over the land and 
over the man took their rise and laid the foundation 
of those tyrannies and injustices, which only in the 
nineteenth century we have begun to apprehend and 
combat successfully. 

We have seen that monopoly of the land has no 
potency or significance, except as the grand fulcrum 
upon which commercial monarchism rests its lever 
to move and rule the world, and that it is this only 
which now stands opposed to human rights and 
social progress. We have here no landlords, and no 
monopolies of any kind, but what are created and 
maintained in the name of commerce and of propri- 
etary rights. This usurpation is potent for greater 
evil than ever was feudalism.* It lacks any shadow 
of justification, and exists onl}' through an ignorant 
regard of the people for the flimsiest forms and fic- 

* " A proper feud was bestowed without price, without a fixed stip- 
ulation, upon a vassal capable of serving personally in the field." — 
Hall AM. 

According to Hallam, also, the feudal system was originally "an 
alliance of free land holders, arranged in degrees of subordination, ac- 
cording to their mutual capacities of affording mutual support." 

"It practically, though imperfectly, popularized the doctrine of the 
reciprocit.y of rights and (lutie.t — a doctrine alike essential to individual 
morality and political freedom. It took mankind, after Mammonism 
(under the now defunct Roman empire) had perverted most of tlieni into 
brazen prostitutes and riglitlcss vagabonds, and gave to everyone a 
fi.\ed social position— a place that he could call Ms own, and where his 



CONCLUSION. 303 

tions of class-imposed legalities. Otherwise there 
now appears no reason why separate ownership 
should interfere or encroach upon the common owner- 
ship of land — common in this still, that while one is 
allowed his allotment in severalty he cannot exclude 
another from equal opportunity' and ownership. 

Whether there is abundant, or only scanty, supply 
of land for all, has no bearing upon the question, be- 
cause the same proportion of people to the land 
remains, even though the land were all owned by one 
man, or divided among all men in proportion to their 
ability to improve and occupy it. If there is enough 
for all, then none but the grossest animal proclivity 
could oppose the equal enjoyment of all without let 
or hindrance. If, however, according to the Malthu- 
sian theory, there is not at the table which nature 
spreads sufficient room for all, then let them take 
themselves away who have done nothing to furnish 
the feast, but who devise measures to hold reserved 
seats, while those who have toiled to place the viands 
upon the board are turned starving away. Nature 
and religion teach us that " he that will not work, 
neither shall he eat." And if man has no natural 
right to anything else in the battle of life, he has a 
right to fight for a place to do the battle. 

It has been made plain, I think, that there is no great 
difficulty in inaugurating a system of land tenure, 
which, giving opportunity to each, would work wrong 

manhood could take root, and thus made it possible for them again to 
feel, instead of feigning, respect and love for one another." — J. H. Hunt. 
"What is sometimes called the feudal feeling has much in common 
vvilh the old feeling of brotherliood which forbade hard bargains." — 
Henry Sumner Maine. 



304 SOCIAL WEALTH. 

to none, but benefit to all. Such is the system nature 
indicates, and to which only blind prejudice, puerile 
love of control, and disposition to shirk duties, and 
to appropriate unearned gratifications, stand opposed. 
The laws by which land is held by one to the exclu- 
sion of others are incapable of justification on any 
moral or economical grounds. Without the enforce- 
ment of such laws by the public will, the natural 
order of ownership would take its course, as it inva- 
riably has where the fallacy that natural rights 
needed to be guarded by statute law did not prevail. 
It is substantially that natural impulse which con- 
trols the settlement of new territories, the working 
of mines, etc., where the laws are determined by com- 
mon conscience and common consent, as in the early 
settlement of California, and as illustrated in the 
common law, grown up where statute law was silent 
in regard to the occupation of land under water, in 
our rivers and estuaries, where bivalves are planted 
and grown. Here the planter is protected in his 
plant, but under such limitations as not to effect the 
exclusion of others. This prevents monopoly of the 
spaces where oysters and clams may be grown, and 
so allows each man an opportunity to employ him- 
self, or join himself to others in his labors. It pre- 
vents, also, a monopoly of the trade in bivalves, and 
the public are thus protected from combinations to 
obtain exorbitant prices, or to use natural oppor- 
tunies to exclusive private aims. It is therefore the 
tenure of nature, not of the legislature, that we need. 
All we should ask of legislators is to undo the bung- 
ling and partial attempts to supplement nature. 
So plain a subject should not need argument ; and 



CONCLUSION. 305 

yet, so infatuated are men with the idea of reforming 
things by legislation, and so superstitious are they 
in their respect for anything " enacted into law," that 
they give no thought to the study of nature's laws, 
and have no respect for her silent, yet constant, in- 
timations. 

Not daring to trust themselves in a discussion of 
the question of laud ownership, our prominent econ- 
omists adopt the convenient expedient of ignoring it, 
yet still assuming that our laws of tenure are but a 
rescript of nature or of the Divine Being, and that 
all proceedings thereunder must necessarily conform 
to the law of supply ai^d demand, although well 
knowing that land traffic is a modern innovation. 
This seemed to make it necessary to inquire into the 
origin of wealth, and into the nature of the factors 
engaged in its production, also to inquire into the 
relation of the active agents in production to each 
other. 

We have endeavored to show that land and labor 
are the only factors in production, and that men en- 
gaging in associative enterprises are co-partners. In 
doing this, we found it necessary to expose the falla- 
cies so common in the thoughts of business and even 
working men, that goods, tools, animals, seeds, or 
commodities of any kind, or under any circumstances, 
are agents in production, or have any power in them- 
selves to increase their economic values. Hence I 
had to consider the ratios of exchange, service, and 
utility. And from this it appears that land and labor 
can have no exchangeable ratio to their own products ; 
that labor, divorced from, or disinherited, of the land, 
is only an abstraction without productive power, and 



306 SOCIAL WEALTH. 

tliat land witliout tlie application of labor is unpro- 
ductive of economic values. We have seen that the 
whole device of income without work is fraudulent 
and without the least justification in ethics or eco- 
nomics ; that it vitiates all exchanges with which it 
is connected, since what is produced by labor cannot 
be brought into any exchangeable relation whatever 
with that which it requires no labor to produce ; that 
all exchanges which involve pure profit, rent, and 
interest, to the extent that they involve them are no 
economic exchanges whatever, but the fraudulent or 
hazardous obtaining of something for nothing. And 
I do not flatter myself, I think, in sujjposing I have 
made these points tolerably plain. 

What alone causes me anxiety is that the AvorUl, 
sunk in its worship of the power which large fortunes 
give, and in the unfraternal struggle which is begot- 
ten of the operation of the very injustices exposed, 
shall give little consideration to those showings, and 
little attention to the facts which must be as apparent 
to all as to me. But reflections of this kind have not 
deterred me from the work which seemed necessary 
to be done. 

Man}^ questions which appear urgent and of im- 
portance to the time, as the question of the currency, 
etc., I have barely noticed, not because they are of 
little account, or because their solution can safely be 
deferred, but because they have their special cham- 
pions, and have already been treated at length, if not 
exhaustively. Even the evils of our land system I 
have not dwelt upon, as they have been set forth 
with much force by the early reformers, and as well 
by Mr. George and Mr. Wallace in a most impres- 



CONCLUSION. 307 

sive manner. Tliey are apparent enougL. everywhere, 
if people will tliink, and tlieir deleterious influence 
surrounds every city, town, or hamlet of our land, 
and presses with fearful weight upon the child of toil. 
To sympathy and sentiment I have made no appeal, 
but to the cool judgment and clear sense of right 
which cannot be wholly wanting among mankind. I 
have sought to avoid denunciation of persons c^r of 
classes. Mankind are much the same in all relations 
and conditions, and if the position of the individual, 
master, and slave were reversed, it would not im- 
prove the real character of the institution. The 
wage worker of yesterday becomes the foreman, boss, 
or employer of to-day, and carries the same heavy 
hand upon those beneath his authority as he has 
experienced from those in authority over him. The 
victim of usmy, or the tenant impoverished by rent, 
no sooner changes position than he becomes a usurer 
or rent-taker, and thinks the system a ver}^ good one 
which enables him to receive the wages for which 
another works ; and thus a moral support is given to 
these customs and institutions which alone contin- 
ues them in power. 

What requires to be done, then, is not the inven- 
tion of some patent scheme or sovereign remedy, but 
the diffusion of truth upon these, fundamental prin- 
ciples among both rich and poor, the intellectual 
professor and the plodding toiler. Our system of 
education is deeply in fault. To be educated in re- 
spect to one's life pursuit is one's first need, since to 
provide for the wants of life is the primary duty of 
each. Under private control of nature in her fields, 
forests, and streams, and the unequal division result- 



308 SOCIAL WEALTH. 

ing therefrom, the children of the poor are kept in 
cTrucl<]jery or taught worse than useless lessons, 
wholly removed, as they mainly are, from any appli- 
cation to industrial life. For practically, by exam- 
ple, they are taught to despise and shirk honest 
labor, and to think that riches and enjoyment flow 
from a great variety of circumstances rather than 
from patient toil. The quick-witted child thus early 
becomes a very "prince of economists." To get 
something for nothing becomes a habit and a cultus, 
which, as he grows in years, he tries to reduce to an 
art. If by shrewd device or subtle pretense he can 
AvhoUy escape work, and saddle the expense of life 
upon others, he learns that under the teachings of 
our " exact economy " and " reformed theology " he 
will be entitled to social distinction and respect, and 
to have his position defended by learned professor 
and titled dignitary, both secular and religious. 

Thus, while the natural wants of men are few, and 
could readily be supplied by a moderate application 
Of labor, the desire to obtain artificial gratifications 
is without end, and the sheerest caprice dominates 
the natural appetites where cost of production no 
longer serves as a check to inordinate desire ; and so 
unremitting toil is thrown upon others. " Thus, by 
the treachery of one part of society in avoiding their 
share of the work, by their tyranny in increasing the 
burthen of the world, an evil is produced quite un- 
known in simpler states of life, and a man of but 
common capacities, not born to wealth, in order to 
secure a subsistence for himself and family, must 
work with his hands so large a part of his time that 



CONCLUSION. 309 

nothing is left for intellectual, moral, aesthetic, and 
religious improvement." — Theodore Parker. 

The first requisite of education is to teach the 
child practically, as well as theoretically, that the 
supply of human wants are supplied never otherwise 
than by human toil ; that labor is to be honored and 
followed, as a means of enjoyment as well as duty, 
and that to endeavor to shirk our proper share of it 
is the most childish and mean thing one can possibly 
do, and is the one weakness we should seek to cor- 
rect in ourselves, or discourage in others. For even 
if labor were a curse instead of the prime source of all 
intelligent enjoyment, how unmanly and uncultured 
is that desire which would seek to escape it and let 
it fall on those more feeble and already overbur- 
dened ! No system of teaching, it seems to me, has 
ever been so well calculated to arrest the develop- 
ment of the child, in its stage of childish imbecility 
and selfishness, as the comfortable theory that every- 
thing is right in trade, and that "the law of the 
market " cancels all moral and humanitary consider- 
ations. It is quite plain to me that popular educa- 
tion is doing little to remedy the wrongs under which 
mankind are suffering. Its text-books are emascu- 
lated of all manly thought upon the great question 
of work and its awards. No references to the " pecu- 
liar institution " in the days of chattel slavery were 
more studiously shunned, nor was its nature more sys- 
tematically misrepresented, than is now practiced in 
our institutions of learning, our pulpits, and public 
press, upon this question of labor and man's right to 
the land and to the products begotten of his toil. 
Exactness and honesty, without which advancement 



310 SOCIAL WEALTH. 

in any science is impossible, are tlie main needs in 
the requisite social education. Lacking these, there 
is little hope of attaining personal security or social 
development. 

Of the criticisms of the paid or truckling advocate 
I have no fear or care. Even the toilers whose 
just claims only I have endeavored to present are 
perchance as likely to censure as to praise, and 
to the self-seeker there will be found little in 
these pages to interest or entertain. Entering 
on my seventieth year, I have no ambition for 
place or public recognition. Neither expectation of 
gain or popular applause has stimulated me to this 
work, but simply a desire to arrive at truth upon a 
subject of the highest importance to human well- 
being which can engage the scientific mind. That I 
have been unable " to complete the science of eco- 
nomics " should not be a matter of surprise, since no 
true science is ever completed. Precisely the nature 
and extent of my contribution will only be generally 
seen when that science shall have become other than 
the empirical thing it now is, and be pursued for 
nobler aims than the buttressing of class preroga- 
tives, or the forming of a base for partisan supremacy 
or the application of doubtful remedies. Let the 
truth be sought. It only can make free, and liberty 
is the very life of human progress. 



APPENDIX. 



SUMMARY OF DEFINITIONS. 

To enable tlie ordinary reader to draw ready com- 
parisons between the latest school of economists and 
thelsonomic conclusions arrived at in Social Wealth, 
I give a summary of each. The first, by Mr. Mac- 
leod, from his " Elements of Economics," pp. 220, 
221, 222 ; the second, as they are shown in our pres- 
ent investigation. 

Economics, or the Science of Wealth, is the science 
which treats of the laws which govern the relations 
of Exchangeable Quantities. 

Wealth is anything whatever whose value can be 
measured in Money ; consists exclusivel}^ of Ex- 
changeable Eights. 

PbopEjITY is not a thing, but a Right — is equivalent 
to Absolute Ownership. 

Jurisprudence is the Science of Eights. 

Economics is the science of the Exchange of 
Eights. 

Economic Quantities are : 

1. Eights to Material Things ; 

2. Eights to Labor or Service ; 

3. Eights to things to he acquired at a future 
time — incorporeal property. 

Value. — Any other economic quantity for which a 
thing will exchange. 

Money is anything whatever which a debtor can 
compel a creditor to take in discharge of a debt ; also 
called Legal Tender. 



312 APPENDIX. 

Credit is a ripflit of action against a person to pay 
or do something. 

Debt is used indiscriminate!}' to mean the right 
to compel payment, and also the Dutij to pay or do a 
thing. 

Baiiter is the direct exchange of one commodity 
for another. 

Sale, or Circulation, is Avhere commodities are 
exchanged for Money or Credit. 

To Produce is to offer any Economic quantity for 
sale or Exchange. 

The Producer is the seller. 

Production is the offering any Economic Quantity 
for sale or Exchange. 

To Consume is to purchase any Economic Quantity. 

The Consumer is the buyer. 

Consumption is the Purchase of any Economic 
Quantity. 

Supply is the Quantity of anything offered for 
sale. 

Demand means the Desire and the Power to pur- 
chase anything, and so may be used to mean the 
Quantity of anything which is given in exchange for 
anything else. 

Cost of Production is the cost of placing anything 
in tlie place where offered for sale. 

Profit is the difference between the cost of Pro- 
duction of anything and its value, or the Quantity of 
anything it can purchase. 

Gain. — Excess of Value over cost of Production. 

Loss is the value less than cost of Production. 

Kate of Profit is the Amount of profit made in 
some given time. 

Productive Labor leaves a profit after cost of Pro- 
duction. 

Unproductive Labor leaves no profit after defray- 
ing Cost of Production. 

Capital is any Economic Quantity used for the 
purpose of Profit, 



APPENDIX. 313 

Fixed Capital remains in the possession of the 
Capitalist, and from which he derives a Revenue by 
its use. 

Floating, or ^Circulating Capital, is that which he 
parts with, and whose value is restored to him in 
the price of the Product. 

Rent means Revenue, or an Annuity. 

Hire means the sum paid for a thing on a single 
occasion. 

Payment. — Whatever is received in exchange for 
anything else. 

Discharge is equivalent to payment. 

Satisfaction is anything which is received as final 
Discharge and closing of any transaction. 

ISONOMIC definitions. 

Capital. — The chief source of Increase. It is divi- 
ded into natural and artifcial. 

Natural Capital. — The land and the labor. There 
is in Nature no other source of increase. 

Artificial, or Institutional Capital. — Certain private 
rights created by custom, statute law, or by the arbi- 
trary will of some conqueror or ruler, which enable 
one to force an Exchange or command labor without 
equitable return, through usurped dominion of the 
land, ownership of the person, or other civil device. 

Capitalism. — That system of social or industrial 
institutions by which an exploiteur is enabled to ap- 
propriate to himself the increase resulting from in- 
dustry, which belongs, and which would otherwise 
go, to the laborer, or be returned to the land. An ab- 
normal relation of labor to commerce, which subjects 
labor to the control of an owner of the land, or of 
any property or goods for which the land will ex- 
change. 

Capitalist. — One who becomes clothed with legal 
rights over the land, or over the man, wdiich author- 
ize him to take from the laborer or from the land 



314: APPENDIX. 

the fruits of industry, to the production of which he 
has not contributed. 

Competition. — "A seeking together." It in free or 
compulsory, mutual or antagonistic. It may be said 
to be free when natural opportunities are enjoyed, 
and mutual when abundance of the thing sought is 
attainable. It then relates only to the degree of suc- 
cess of each. 

Conservation of Wealth. — The act by which com- 
modities or goods have their exchangeable values 
retained through change of form or other means ; con- 
verting them into money or parting with them on 
credit is a common means. 

Co-operation. — Operating together as co-partners, 
who stand in equitable relation to each other. It is 
contrasted with contest, as of two hostile armies ; but 
allied armies co-operate with each other ; also with 
competition in its forced or destructive sense. It is 
not inconsistent with emulation or free competition 
in exchange. One who applies his labor to a specific 
industry, whether combined with others or otherwise, 
and offers his product in lumest exchange, is a co-oper- 
ator in the best sense, industrially and economically. 

Credit or Debt. — An incompleted exchange, in 
which one party has relinquished, and the other 
party has obtained, possession of any goods, while 
the ownership of the goods or things for which they 
are, or are to be, exchanged, remains in the hands of 
second party. As an act of conservation, which it 
usually is, and in which alone it can have any recog- 
nition in exact economics, there is in equity service 
done the creditor, not the debtor. 

Demand and Supply. — A phrase to indicate a short 
or excessive production or use of a thing of com- 
merce at any given time and place. Its operation 
under freedom is to render stable the " ratio of ex- 
change." 

Economy. — The science which treats of the produc- 
tion and uses of goods. It has three divisions : 



APPENDIX. 315 

Personal Economy treats of the prudent use of one's 
force in procuring goods, and the frugal use or con- 
sumption of the same. 

Social Economy treats of the productive agencies of 
a society or community, and of the division and ex- 
change of products. 

Political Economy treats of the relation of the gov- 
ernment or state to industry and commerce, and of 
the methods of raising and expending its revenues. 

Inceease, natural. — The productions of land and 
labor in excess of consumption 
in a completed period. 

, capitalistic. — Accumulations of wealth 

from arbitrary control of land or of labor, without 
equitable compensation or return. 

Increment, unearned. — Additions of price to real 
and other estate, for which no service has been ren- 
dered ; but it is not therefore to be understood that 
this increase is not taxed back upon labor- — one of 
the main abutments of the capitalistic theory of pro- 
duction and exchange. 

Interest. — A fraudulent claim of one party to an 
exchange, by which a charge is made for the "flight 
of time " between the inception and the completion 
of an exchange ; or it is a charge for having a value 
conserved, and for which service compensation is 
due, not to the creditor, but to the debtor. 

Money. — A commodity, or the representative of a 
commodity, accepted by or forced upon the " com- 
mon consent," as an invariable ratio and exchange 
tally. 

Profit. — A false entry in the business ledger, in 
which a dealer charges twice for •the same thing. 
Firstly, for the service he has rendered ; and, sec- 
ondly, for a profit on the goods he has sold his cus- 
tomer. The charge which compensates all the service 
rendered is not profit, nor is such increase of price 
as may be required to average risks, and guard 
against losses unavoidable to the business. 



316 APPENDIX. 

Ratio or Utility. — The relative proportion of 
services or goods to effect useful ends in the suste- 
nance of human life, and in the promotion of human 
enjoyment. It is constant or invariable. 

Batio of Service. — The relative proportion in 
which different services, as measured by their con- 
tinuance in time, procure or produce useful things, 
or effect useful ends. 

Ratio of Exchange. — The relative proportion in 
which one service or commodity will exchange for 
another service or commodity at a given time and 
place. It is an ever-varying ratio, whose inean is the 
Ratio of Service. 

Rent. — "An immoral tax ;" a tribute for privilege 
to be, to labor, or to exercise the right and duty of 
Use, It is similar to profit and interest, and consti- 
tutes the basis on which they both depend. 

Usury. — The same as interest. The law which at- 
tempts to distinguish between them has no ethical, 
economic, or logical basis ; one, or one hundred per 
cent, being the same in nature, and only differing in 
degree. 

Value. — An estimated ratio which one thing or 
service bears to another thing or service. In rela- 
tion to Money, it is Price. 



INDEX. 



Agrarian Lat;^s, 146; of tlie kings 
and consuls, 147; how they could 
have been made effective, 149 ; as 
regarded by the aristocracy of 
Eome, 152, 153. 

Arnold, Thomas, on the agrarian 
law, 146. 

Atkinson, Edward, on inequality of 
wages, note to, 11; contracts 
under lien laws at the Soutli, 207. 

Balakce of Trade, 32-38 ; should 
have embraced fertilizers instead 
of gold, 245. 

Blackstone, titles to land, 124; nat- 
ure of law, 127. 

Bounty of nature, power to tax de- 
rived from, by Mr. Clark, 258; 
is, for tliose who use it, a mere 
metaphysical terra, 259 ; named 
by Aristotle, 260; useless as a 
scientific term, 260; shared by 
the pest and parasite as well as 
by man, 261. 

Cairnes, J. E , on free trade in 
land, 270. 

Calhoun, J. C, the foremost econo- 
mist in public life of his time, 
deemed slavery the true relation 
of capital and labor, 30. 

Capital, artificial, subject to steady 
loss or decrease, 169; land and 
labor the only, 170-174. 

Capitalism, its origin, 40; stealthy 
absorption of power, 41, 42, 174; 
its logical aim the subjection of 
the land and of the people, 249. 

Capitalist and Socialist, issue be- 
tween, 174, 175. 

Carey, Uenry C, representative of 



a retrograde school, 38, 39 ; 
clearly pointed out the errors of 
the French and English schools, 
but offered a worthless substi- 
tute, 266. 

Chattehsm, effect on industry, 25; 
based on pretended contract, its 
only justification, 26. 

Clarke, Edward H. G., on higher 
law of property and death-rate 
tax, 192, 193; chides Mr. George, 
and puts him m a dilemma, 258, 
259; on the "unconscious " and 
bounty of nature, 259, 260 ; at- 
tempt to correct nature's mis- 
takes, 262. 

Commoners, an abuse of the Com- 
munistic idea, 143. 

Cobden Club, and free trade in land, 
267; credit to, 273. 

Comte, Charles, on right to land, 
125. 

Comte, Augusta, moralization of 
wealth, 297. 

Contract, slavery the primitive, 26; 
serfs, slaves, or disinherited 
workers cannot make, 28 ; ves- 
tige in our Constitution, 121, 122; 
law of, 205; debt, 206; in lien 
law, 207 ; when not binding, 209- 
21 1 ; in interest bearing debt, 
214; for wages doubly invalid, 
297. 

Coolej^, T. M., partnership of em- 
ployees, 194. 

Co-operation, present in all eom- 
bnied labor, 120; what, and what 
not, 201, 202; present in pro- 
duction, but absent in capitalistic 
division, 203. 

Cullom, Sir John, on wages in 
fourteenth century, 29. 
817 



318 



INDEX. 



Daguerrb, the inventor, 86; Ids 

discovery not patented by him, 

88. 
Division, system of, practically the 

same under slavery, serfdom, and 

capitalism, 29, 30. 

Economics, a branch of social econ- 
omy, 18; now pivoted on "sup- 
ply and demand," 19; the sphere 
of, constantly narrowing, 31; 
definition of. by latest scliool, 3tJ. 

Enclosure acts, 131. 

Exchange, as social, not a private 
interest, 52 ; ratio in, 235 ; of 
material elements, 244. 

Fancher, Julius, on Eussian agra- 
rian legislation, 140, 142. 

Fencing of public lands, 144. 

Feudal system tlie successor of 
cliattclism ; its effect on indus- 
try, 27, 28; growth, 134; change, 
135. 

George, Henry, mistaken as to 
rent and interest, 61, 64, 65 ; 
special plea for interest, 65, 66, 
67 ; builds on a buttress dis- 
mantled by himself, 68; atUicks 
an obsolete view of the wages 
fimd, 98; instance of San Joa- 
quin Valley, LOG; confusion in 
regard to productive factors, 191- 
193 ; reduces his own scheme to 
an absurdity, 261 ; opposes re- 
muneration to land holders, 274. 

n olden Rule quoted to favor prop- 
erty, )jut nut man, by economists 
and jurists, 53. 

Gibbon, Edward, on private prop- 
erty and growth of monopoly, 
156. 

Hallam, on comparative wages 
tmder feudalism and capitalism, 
28; note to, 302. 

Hunt, John H., industry the base 
of true honesty and worsliip, 
note to, 10 ; on law of use, 209 ; 
note ; one of the early reformers, 



299 ; on working of the feudal 
system, note to, 302. 

Individualism as a divergent force, 
40; compatible with Socialism, ib. 

Industry, tendency to organize 
under civil rule, 8; iin.dysis of 
its elements demanded, 9; the 
fundamental social problem, 10; 
an exact science of, 237. 

Interest, how derived, 48 ; sj'nony- 
inoiis with rent and profit, 54; 
unjust and irrational, 56, 57, 58; 
relation to land teiuire and pa)'- 
ment in kind, 60; a geometrical 
ratio, 62 sources from which 
only it is paid, 63; however 
shifted, falls on labor only, 225. 

Isonomics, the basis of the French 
school, 36. 

Julian, Geo. W., on corruption of 
Department of the Interior, 145. 

Jubilee, Hebrew, set men and the 
land free, 152. 

Kellogg, Edward, his valuable 
analysis, but futile remedy, 266. 

Labor, early subjection of, 8 ; ardu- 
ous, the poorest paid, 1 1 ; always 
produces a change in stipply and 
demand, 16; not sold, but only 
the thing in which it is con- 
creted, 21; with land the oidy 
capital, 171; the oidy stable ra- 
tio in exchange, 241, 243. 

Land, what tlie term embraces, 124 ; 
and labor always capital, never 
commodities, 171; traffic in, a 
sale of kingly prerogatives, 159; 
return to the land, 238 ; free 
trade in, 267-270; not a proper 
subject of sale, 272 ; nationaliza- 
tion, 273-280; suited to tradi- 
tions of Enolish law, 277; need- 
ed by all, 291. 

Land Ownership, importance of the 
qnestion of, and original riglit, 
124. 

Land Reformers, the carlv, 279. 



INDEX. 



319 



Laveleye, Eraile, original tenure of 
land, 151; compares prolits and 
interest witli rent, note to, 281. 

Locke, John, right to land, 125; 
right of property, 153. 

Macaulay, on crown grants, 142. 

Macleod, H. D., ptn-pose of his 
book, 13; diamond instance, 1.4; 
triumph over Adam Smitli, 15; 
creates wealth out of nothing, 
16; defines property, 17; leader 
of the later school, 36; unilat- 
eral contract, and change from 
feudalism, 125; on land sj'^stem 
of Rome, 149 : absurd classifica- 
tion, 173; on satisfaction, 208 
three sources of wealth, 189 
economic prestidigitation, 190 
on absolute property in land, 274. 

Maine, Henry Sumner, origin of the 
market, 43, 44; trade in land, 45 ; 
theories of rent, 46 ; origin of 
property in land, 126. 

Mallock, W. H., champions the ob- 
solete theory of the wages fund, 
96; lectures Mr. George, 97; 
lame defense of landlordism, IGO ; 
unconscious arraignment of cap- 
italism, 161; indorses Malthus, 
162; right to land and to expel 
the landless, 166; on limitation 
to ownership, note to, 291. 

Marx, Karl, on competition, 20 ; 
term for production under it, 27. 

Mill, John Stuart, on law of private 
property, 155. 

Morier, R. B. D., conversions of 
public duties to private rights, 
129; on feudal tenure, 135; how 
peasants became serfs, 136, 137 ; 
peasants' war, 138. 

Market, origin of, 43 ; law of, su- 
preme in United States, 45; the 
only justification of rack rent, 
reduces land to a commodity, 45 ; 
affected by manipulation, 235. 

Mercury, the patron of cheating, 44. 

Machinery, effect on production, 83 ; 
prejudice of workers against, 90 ; 
to answer claim of capital, must 



become equivalent to " perpetual 
motion," 91, 92. 
Money and credit, 216; not satis- 
faction, 217, 218; wh.=^n variable 
affects credits most deeply, 219; 
what is pure credit money ? 220 , 
of the future will be based on 
labor, not gold, 227 ; metallic, 
an unequal standard and decep- 
tive base, 243. 

STATURAL Selection, progress 
through, 180 ; hmit to, 181 ; pn - 
fessor Sumner on, 182-184. 

Niebuhr on purpose of agrarian 
laws, 146 ; mistaken as to a 
practicable agrarian law, 149. 

Opportunity, no equality of under 
existing laws of tenure, 12. 

Occupation, the basis of true own- 
ership, 125, 186, 187. 

Ownership of land is sovereignty, 
124; only a life tenancy, 133; 
private, a limitation to usurpa- 
tion, 156 ; cannot be extended, 
157; collective limited, 158; 
abuses under, growing intoler- 
able, 159. 

Parker, Theodore, thoughts on 
labor, note to, 178, 309. 

Partnership in production, 1 94-1 99 ; 
practically admitted, 200, 201. 

Peasant War, 138, 139. 

Perry, Professor, a pure school 
economist, 36; his discovery in 
the science, 244. 

Production, one principle of, in all 
s,ystems, 28; partnership in, 194. 

Profit, how derived, 48 ; not pure 
when compensating service, 49, 
50 ; a fraudulent charge, 50 ; 
cannot honestly exist, 53 ; inter- 
changeable with interest and 
rent, 54. 

Quesnat, the originator of eco- 
nomical science, 32; the school 
of, sought to establish equal 
rights, 33, 34. 



320 



INDEX. 



Rent, the paying for land by in- 
stalments, 46 ; how derived, 48 ; 
the conversion of pubhc tax, 51 ; 
the despair of science, the price 
of monopoly, 7 1 ; unnecessary, 
80 ; depends on necessity of bor- 
rowers, 81. 

Ricardo, specious theory of rent, 
67, 68 ; shown to be erroneous, 
69; practical test, 72; on nat- 
ural rate of wages, 132. 

Rights, natural, name given their 
science by the French econo- 
mists, 33, 38. 

Say, J. B., right to land, 125; 
source of value, 229. 

Schurz, Carl, corruption of the land 
office, 145. 

Slave trade the basis of many fort- 
unes, 9 

Smith, Adam, leader of English 
school, 35; definition of a cap- 
italist, 56; on natural rate of 
wages, 132; animals, other than 
man, do not trade, 251. 

Smith, Gerritt, favored purchased 
emancipation of slaves, 276. 

Socialism, compatible with individ- 
ualism, 40. 

Sunnier, Professor, on natural se- 
lection, 182, 184. 

Taxation as a remedy, 255; a 
compulsory exchange, 256; es- 
sence of despotic power, 258; 
looked to by tax reformers as a 
sovereign remedy, 258; applica- 
■ tion of " death rate " to, 260, 263; 
repudiated by nature, and always 
thrown back upon labor, 261; 
once tlioiight necessary to sup- 
port a church — Mr. Clark's plan 
of a tax of twenty per cent, 2G2 : 
will not work as a remedy 263 , 
264; of land values would in- 
crease rather tli.'in ameliorate the 
sufferings of labor, 282-285. 

Turgot, disciple of Qiiesnay and 
minister to Louis XVI., 33, 34. 



Tender, Legal, not necessary to 
effect exchanges, 222. 

Thornton on demand and suppl}-, 19. 

Truth, a moral quahty essential to 
any scientific inquiry, 52. 

Tools ill production, 83 ; improve- 
ment in them a growtli, 84 ; con- 
suined in production of goods, 
92, 93 ; Bastiat's theory of, 94. 

Utility, according to Bentham, 
tlie basis of morals, and to Say 
the source of value in econom- 
ics, 229; value in, 230; ratio of, 
the base of all exactness in the 
science, 231 ; only exchangeable 
in service, 239. 

Value, 228; based on utihty, 229; 
three forms of, 230 ; of land and 
of labor under subjection, 247 ; 
of land as defined, 248; of a 
chattel, 250. 

Wages, nature of, 96; fund not 
recognized by later economists, 
an exchange, a credit on an ear- 
nest, 97-99 ; natural, the whole 
product of labor, 100; inequality 
in, 117, 118, 122; modified part- 
nership, 197; seductive nature 
of, 198. 

"Wahace, Alfred Russell, gives a 
name to the natural law of land 
ownership, note to, 186; on na- 
tionalization of the land, 277-280; 
his plan radically ditferent from 
that of Mr. George, 279. 

"War, its costs and sacrifices borne 
by industry, 8; perpetual be- 
tween primitive societies, 43; 
Peasant, 138. 

Warren, Josiah, cost the limit of 
price, note to, 14. 

Wealth, race for, 12; conservation 
of, 76-79; private, largely the 
creation of law, 109: such may 
be destroyed without loss to so- 
ciety, 109-112. 









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